Can Ben Jerrys terminate the agreement if the operator is dissolved?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
15.1 OPERATOR shall be in default under this Agreement, and all rights granted to OPERATOR herein shall automatically terminate without notice to OPERATOR, if OPERATOR shall become insolvent or make a general assignment for the benefit of creditors; if a petition in bankruptcy is filed by OPERATOR or such a petition is filed against and not opposed by OPERATOR; if OPERATOR is adjudicated a bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver of OPERATOR or other custodian for OPERATOR's business or assets is filed and consented to by OPERATOR; if a receiver or other custodian (permanent or temporary) of OPERATOR's assets or property, or any part
thereof, is appointed by any court of competent jurisdiction; if proceedings for a composition with creditors under any state or federal law should be instituted by or against OPERATOR; if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is filed); if OPERATOR is dissolved; if execution is levied against OPERATOR's business or property; if suit to foreclose any lien or mortgage against the Premises or equipment is instituted against OPERATOR and not dismissed within thirty (30) days; or if the real or personal property of the Scoop Shop shall be sold after levy thereupon by any sheriff, marshal, or constable.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, Ben Jerrys can terminate the franchise agreement if the operator is dissolved. Specifically, if the operator is dissolved, all rights granted to the operator automatically terminate without notice.
This means that if the franchisee's business entity ceases to exist, Ben Jerrys has the right to immediately end the franchise agreement. The franchisee would lose all rights to operate the Ben Jerrys shop. This clause protects Ben Jerrys from potential liabilities or operational issues that could arise if a dissolved entity continued to operate under its brand.
This type of clause is relatively standard in franchise agreements. It is crucial for prospective franchisees to understand the conditions under which their agreement can be terminated, as termination can result in significant financial and operational disruptions. Franchisees should seek legal counsel to fully understand their obligations and potential risks associated with these termination clauses.