What is considered a 'Restricted Person' in the context of the Bananas Smoothies Frozen Yogurt agreement?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Noncompetition and Non-solicitation: During the term of this Agreement neither Developer nor any of Developer's Owners if Developer is a Business Entity (a "Restricted Person") will:
(i) engage in a Competitive Business or perform services for a Competitive Business, directly or indirectly, as a director, owner, proprietor, officer, manager, employee, consultant, representative, agent, independent contractor or otherwise, except under a franchise agreement with Franchisor or Franchisor's affiliates;
(ii) have any direct or indirect interest, as a disclosed or beneficial owner, in a Competitive Business, except under franchise agreements with Franchisor or Franchisor's affiliates;
(iii) have any direct or indirect interest, as a disclosed or beneficial owner, in any entity which is granted or is granting franchises or licenses to others to operate any Competitive Business, except EYB Concepts under franchise agreements with Franchisor or Franchisor's affiliates; or
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, a "Restricted Person" is defined within the context of noncompetition and non-solicitation agreements. Specifically, during the term of the Area Development Agreement, neither the Developer nor any of the Developer's Owners (if the Developer is a Business Entity) is permitted to engage in certain competitive activities. This restriction is designed to protect Bananas Smoothies Frozen Yogurt's confidential information and maintain a free exchange of ideas within the franchise system.
In practical terms, this means that if you are a franchisee (the Developer) or an owner of a franchisee business entity, you are considered a Restricted Person. As such, you are prohibited from engaging in or having an interest in a Competitive Business. A Competitive Business is defined as any business or facility that owns, operates, manages, franchises, or licenses a concept featuring or selling similar types of food, beverages, or smoothies as Bananas Smoothies Frozen Yogurt. This includes, but is not limited to, businesses like Green Leaf's Beyond Great Salads and The Market By Villa.
The restrictions prevent a Restricted Person from acting as a director, owner, officer, manager, employee, consultant, representative, agent, or independent contractor for a Competitive Business, except under a franchise agreement with Bananas Smoothies Frozen Yogurt or its affiliates. Furthermore, a Restricted Person cannot have a direct or indirect interest in any entity that grants franchises or licenses to others to operate a Competitive Business, again with the exception of EYB Concepts under franchise agreements with the Franchisor or its affiliates. This ensures that franchisees and their owners remain fully committed to the Bananas Smoothies Frozen Yogurt system and do not divert resources or knowledge to competing ventures during the term of their agreement.