What is the scope of the right granted to a Ben Jerrys franchisee through the Franchise Agreement?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
1. GRANT
- 1.1 BEN & JERRY'S hereby grants to OPERATOR, on the terms and conditions contained in this Addendum, as well as the terms and conditions contained in the Franchise Agreement, the right, and OPERATOR undertakes the obligation, to operate the Test Shop under the System, as well as under the Proprietary Marks designated by BEN & JERRY'S for use under the System.
- 1.2 OPERATOR understands and acknowledges that the rights granted under this Addendum are non-exclusive, and that BEN & JERRY'S reserves all rights for itself,
including without limitation, the rights to own, acquire, establish, supply, and/or operate and license others to establish and operate any business, including businesses that scoop, sell and/or distribute the Products and other goods under any proprietary marks (including the Proprietary Marks) at any location, notwithstanding the proximity of such locations to the Test Shop and the Approved Location; provided, however, this Addendum shall not modify or alter OPERATOR's rights under the Franchise Agreement within the Territory.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 67–68)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, the franchisee (referred to as "OPERATOR") receives the right and obligation to operate a Test Shop under the Ben Jerrys system and proprietary marks. However, these rights are non-exclusive, meaning Ben Jerrys retains the right to operate or license others to operate businesses that sell similar products under the same marks, even near the franchisee's location. This is detailed in Section 1.1 and 1.2 of the Addendum to the Franchise Agreement.
The rights granted to the franchisee are specifically for the operation of a Satellite Shop, if applicable, and the standard Section 1.2 of the Franchise Agreement is replaced with terms specific to off-premises activities, on-demand sales, and mobile vending, subject to Ben Jerrys's approval. The franchisee acknowledges that the agreement does not grant any protected territory for the Scoop Shop, and Ben Jerrys can establish or license others to operate Scoop Shops at any location except the Authorized Location.
Ben Jerrys also retains rights to operate businesses under its marks outside the Development Area and to sell products outside the Development Area. The franchisee is obligated to offer and sell products from the Test Shop only at the Approved Location and to retail customers for personal consumption, and cannot sell products other than those listed in Exhibit A or approved in writing by Ben Jerrys. Any default under the Franchise Agreement for an Affiliated Shop also constitutes a default under the agreement for a Satellite Shop, and vice versa.
For a prospective franchisee, this means that while they are granted the right to operate a Ben Jerrys shop, the agreement provides Ben Jerrys with significant flexibility to operate or license other shops, including those that may compete directly with the franchisee's location. The franchisee's rights are limited to the specific location and approved activities, and they must adhere strictly to Ben Jerrys's guidelines regarding products and operations. The lack of a protected territory is a notable risk, as Ben Jerrys could potentially open another location nearby, impacting the franchisee's sales.