Under what circumstances related to family members engaging in a Competitive Business would a Ben Jerrys operator be considered in default of their agreement?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
Furthermore, OPERATOR acknowledges and agrees that OPERATOR shall be considered in default under this Agreement and that this Agreement will be subject to termination as provided in Section 15 herein, in the event that a person in the immediate family (including spouse, domestic partner, parent or child) of OPERATOR (or, if OPERATOR is other than an individual, each Owner that is subject to these covenants) engages in a Competitive Business that would violate this Section 17.3.2 if such person was subject to the covenants of this Section 17.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, an operator can be considered in default of their agreement if a member of their immediate family engages in a competitive business that violates the terms outlined in Section 17.3.2 of the agreement. Immediate family includes a spouse, domestic partner, parent, or child of the operator. If the operator is not an individual, this condition applies to each owner subject to these covenants.
This clause is significant because it extends the operator's obligations to their close family members, preventing them from circumventing the non-compete agreement by having a relative operate a competing business. The definition of a "Competitive Business" is detailed in Section 17.3.2, but is not included in the provided documentation.
As a prospective franchisee, it is crucial to fully understand the scope of Section 17.3.2 to assess the potential impact on your family and to ensure compliance with the franchise agreement. You should seek clarification from Ben Jerrys regarding what constitutes a "Competitive Business" and how this clause is enforced in practice.