How does Bananas Smoothies Frozen Yogurt account for the portion of training services that are not brand-specific?

According to the 2025 FDD, Bananas Smoothies Frozen Yogurt estimates the standalone selling price of training services that are not brand-specific using an adjusted market assessment approach. The company first allocates the initial franchise fees and the fixed consideration under the franchise agreement to the standalone selling price of the training services that are not brand-specific. Any residual amount is then allocated to the right to access the company's intellectual property.

This means that Bananas Smoothies Frozen Yogurt separates the value of general training from the value of its brand-specific training and intellectual property. The portion of the initial franchise fee attributed to non-brand-specific training is recognized as revenue as those training services are provided to the franchisee. This approach ensures that revenue recognition aligns with the delivery of services.

For a prospective franchisee, this accounting method indicates that a portion of the initial franchise fee covers the cost of training that is not unique to the Bananas Smoothies Frozen Yogurt brand. This could include general business management skills, operational procedures, or other skills applicable to various businesses. The remaining portion of the initial franchise fee is tied to the brand's specific intellectual property and is recognized over the term of the franchise agreement. This distinction may be relevant for franchisees assessing the value and cost breakdown of the franchise opportunity.