Who benefits from the goodwill established by a Bananas Smoothies Frozen Yogurt franchisee's use of the Marks?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee's use of the Marks and any goodwill established thereby inures to Franchisor's exclusive benefit.
- 12.02 Acknowledgment of Ownership.
As between the parties, Franchisee acknowledges Franchisor's ownership of all right, title, and interest in and to the Marks, the identification schemes, standards, specifications, operating procedures, and other concepts embodied in the System.
Franchisee accordingly agrees that any unauthorized use of the System and the Marks is and shall be deemed an infringement of Franchisor's rights; that, except as expressly provided by this Agreement, Franchisee acquires no right, title, or interest therein; that any and all goodwill associated with the System and the Marks shall inure exclusively to Franchisor's benefit; and that, upon the expiration or termination of this Agreement, no monetary amount shall be assigned as attributable to any goodwill associated with Franchisee's use of the System and the Marks.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, the goodwill established by a franchisee's use of the Marks inures to the exclusive benefit of the Franchisor, Everything Yogurt Brands, LLC. This means that while a franchisee's efforts may increase brand recognition and customer loyalty in their local market, the resulting value of that goodwill belongs solely to the Franchisor. The franchise agreement does not confer any goodwill or other interests in the Marks upon the franchisee.
This has significant implications for a prospective Bananas Smoothies Frozen Yogurt franchisee. Upon the expiration or termination of the franchise agreement, the franchisee will not be compensated for any goodwill they have built up during the term of their agreement. The franchisee cannot claim any monetary amount attributable to the goodwill associated with their use of the Bananas Smoothies Frozen Yogurt system and Marks.
This arrangement is typical in franchising. The franchisee is granted the right to use the brand's trademarks and system, but the franchisor retains ownership of the brand and its associated goodwill. This allows the franchisor to maintain consistency across the franchise system and to benefit from the overall brand recognition and reputation.
The franchisee is also prohibited from contesting the Franchisor's ownership of the Marks or taking any action that could harm the brand's reputation. This further reinforces the Franchisor's control over the brand and its goodwill. The franchisee must notify the Franchisor of any potential infringement of the Marks by others.