Under what circumstances will a Ben Jerrys developer automatically be deemed in default without notice?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
6.1 DEVELOPER shall be deemed to be in default under this Agreement, and all rights granted to DEVELOPER herein shall automatically terminate without notice to DEVELOPER, if DEVELOPER shall become insolvent or make a general assignment for the benefit of creditors; if a petition in bankruptcy is filed by DEVELOPER or such a petition is filed against and not opposed by DEVELOPER; if DEVELOPER is adjudicated as bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver of DEVELOPER or other custodian for DEVELOPER'S business or assets is filed and consented to by DEVELOPER; if a receiver or other custodian (permanent or temporary) of DEVELOPER'S assets or property, or any part of the Development Agreement, 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 DEVELOPER; if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is filed); if DEVELOPER is dissolved; if execution is levied against DEVELOPER'S business or property; if suit to foreclose any lien or mortgage against any asset of DEVELOPER or DEVELOPER'S Scoop Shops is instituted against DEVELOPER and not dismissed within thirty (30) days; or if any asset of
DEVELOPER or of DEVELOPER'S Scoop Shops shall be sold after levy thereupon by any sheriff, marshal, or constable.
Source: Item 23 — RECEIPTS (FDD pages 134–358)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, a developer will automatically be deemed in default without notice under specific financial and legal circumstances. These include scenarios indicating financial instability or legal jeopardy, such as becoming insolvent, making an assignment for the benefit of creditors, or facing bankruptcy petitions.
Further conditions that trigger automatic default involve judicial actions or judgments against the developer. Specifically, if a receiver is appointed for the developer's business or assets, or if a final judgment remains unsatisfied for thirty days or longer (unless a supersedeas bond is filed), the developer is considered in default. Other events leading to automatic default include the dissolution of the developer's business, the levy of execution against their business or property, or the institution of foreclosure suits against the developer's assets or Scoop Shops that are not dismissed within thirty days.
Finally, the sale of any asset of the developer or their Scoop Shops after levy by a sheriff, marshal, or constable also results in automatic default. These conditions are designed to protect Ben Jerrys by ensuring that developers maintain financial and legal stability, and their failure to do so can lead to immediate termination of the development agreement without prior notice or opportunity to cure the default.