Does Bananas Smoothies Frozen Yogurt have to approve the economic terms of a franchise transfer?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
anchisor, of any and all claims against Franchisor and its respective directors, officers, employees, and agents;
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- The Franchisor must approve the economic terms and conditions of such transfer including, without limitation, that the price and terms of payment are not so burdensome as to affect adversely the transferee's operation of the Restaurant;
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- If the Franchisee finances any part of the sale price of the transferred interest, the Franchisee and/or its owner agree that all obligations of the transferee under or pursuant to any promissory notes, agreements or security interests reserved by the Franchisee or its owners in the assets of the Restaurant or the Premises shall be subordinate to the transferee's obligations to pay Royalty fees, Advertising Fund contributions, and other amounts due to the Franchisor;
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- The Franchisee must make such repairs and renovations to the Premises to conform to Franchisor's then-current standards for design, trade dress, decor, and equipment;
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Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, the franchisor's approval is required for the economic terms and conditions of a franchise transfer. This includes ensuring that the price and payment terms do not negatively impact the transferee's ability to operate the Bananas Smoothies Frozen Yogurt restaurant.
Specifically, Bananas Smoothies Frozen Yogurt must approve the economic terms to ensure the financial viability of the new franchisee. This protects the brand's reputation and the interests of other franchisees by preventing a transfer that could lead to financial distress or failure of the transferred location. The franchisor also requires that if the franchisee finances any part of the sale price, the franchisee's rights to receive payments are subordinate to the obligation of the new franchisee to pay royalties, advertising fees, and other amounts due to Bananas Smoothies Frozen Yogurt.
This condition is typical in franchising, as franchisors want to maintain brand standards and ensure the continued success of each location. By retaining control over the economic terms, Bananas Smoothies Frozen Yogurt can help ensure that the new franchisee is set up for success and that the transfer benefits all parties involved. Additionally, the franchisee is obligated to pay Bananas Smoothies Frozen Yogurt a sales commission of eight percent (8%) of the gross selling price of the Restaurant, the franchise, and all related assets if Bananas Smoothies Frozen Yogurt obtained the purchaser (transferee) for the Franchisee.