How is the amount of the Area Development Fee determined for a Bananas Smoothies Frozen Yogurt franchise?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
t Agreement
If you are qualified and enter into an Area Development Agreement with us, you must pay an initial Development Fee when you sign the Area Development Agreement with us. The amount of the Area Development Fee depends upon the number of restaurants to be opened. The Area Development Agreement requires an upfront payment of one-half of the total Initial Franchise Fee (based upon the number of restaurants being developed) and is due at the time of execution of the Deposit Agreement. For example, if 2 restaurants are developed under the Area Development Agreement inside the Continental U.S., the Development Fee will be $50,000 USD ($25,000 USD per restaurant). One-half (or $25,000 USD) is due upon signing the Deposit Agreement. After paying the Development Fee (as explained above), at the time of executing each Franchise Agreement for each restaurant to be developed under the Area Development Agreement after the first one, you must pay the balance of the initial franchise fee. These fees are non refundable and are due and payable upon signing each Franchis
Source: Item 5 — INITIAL FEES (FDD pages 15–17)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, the Area Development Fee is dependent on the number of restaurants the franchisee commits to opening. The agreement necessitates an upfront payment of one-half of the total Initial Franchise Fee, calculated based on the number of restaurants to be developed. This payment is due when the Deposit Agreement is executed. For instance, if an Area Development Agreement is made for two Bananas Smoothies Frozen Yogurt restaurants within the Continental U.S., the total Development Fee would be $50,000 (at $25,000 per restaurant). Therefore, $25,000, representing one-half of the total fee, is due upon signing the Deposit Agreement.
After the initial Development Fee payment, the franchisee must pay the remaining balance of the initial franchise fee when executing each subsequent Franchise Agreement for restaurants developed under the Area Development Agreement, after the first one. These subsequent payments are non-refundable and are due upon signing each individual Franchise Agreement.
This structure is fairly typical in franchising, as it incentivizes developers to commit to multiple locations upfront, aiding the franchisor in expanding their brand presence. However, prospective Bananas Smoothies Frozen Yogurt franchisees should carefully consider the financial commitment and development timeline before entering into an Area Development Agreement, as these fees are non-refundable.