Under what condition does the Maryland Securities Commissioner require a financial assurance related to initial fees and payments for a Ben Jerrys franchise?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.5 Notwithstanding the provisions of this Section 4, based upon BEN & JERRY'S financial condition, the Maryland Securities Commissioner has required a financial assurance.
Therefore, all initial fee and payments shall be deferred until the franchisor completes its pre-opening obligations under the Development Agreement.
- 4.1 …Notwithstanding the provisions of this section, based upon BEN & JERRY'S financial condition, the Maryland Securities Commissioner has required a financial assurance.
Therefore, all initial fees and payments owed by OPERATOR shall be deferred until BEN & JERRY'S completed it pre-opening obligations under the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 133–134)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, the Maryland Securities Commissioner requires a financial assurance due to Ben & Jerry's financial condition. This requirement affects both the Franchise Agreement and the Development Agreement.
Specifically, for the Franchise Agreement, all initial fees and payments owed by the operator are deferred until Ben Jerrys completes its pre-opening obligations. This means a new franchisee in Maryland will not have to pay the initial franchise fee until Ben Jerrys has fulfilled its responsibilities, such as site selection assistance, training, and providing operations manuals.
Similarly, under the Development Agreement, all initial fees and payments are deferred until Ben Jerrys completes its pre-opening obligations. This ensures that franchisees are not paying fees upfront before Ben Jerrys has provided the necessary support and resources to get their Ben Jerrys Scoop Shop up and running. This financial assurance protects franchisees in Maryland, given Ben Jerrys's financial situation, by aligning fee payments with the delivery of pre-opening services.