What constitutes a default or breach of the Bananas Smoothies Frozen Yogurt Franchise Agreement?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
and does not correct such failure within thirty (30) days after notice of such failure to comply is delivered to Franchisee.
- (i) Any default or breach by Franchisee, an affiliate of Franchisee which has been approved by Franchisor, and/or any Guarantor of Franchisee, of any other agreement between Franchisor and Franchisee and/or such other parties (approved affiliates or Guarantor) will be a default of this Franchise Agreement and will result in the termination of this Franchise Agreement at Franchisor's discretion. Any default or breach of this Franchise Agreement by Franchisee and/or an affiliate of Franchisee which has been approved by Franchisor, and/or any Guarantor of Franchisee, will be deemed a default or breach under any and all such other agreements between Franchisor and Franchisee, its affiliate and/or any Guarantor of Franchisee. If the nature of the default under any other agreement would have permitted Franchisor (or our affiliates) to terminate this Franchise Agreement if the default had occurred under this Franchise Agreement, then Franchisor will have the right to terminate all such other agreements in the same manner provided for in this Franchise Agreement for termination hereof. Franchisee's "affiliates" means any persons or entities controlling, controlled by or under common control with Franchisee.
Notwithstanding the foregoing, if Franchisee shall be late in the payment of royalties or any other monies due to Franchisor or its affiliates, two (2) times in any twelve (12) month period, then Franchisor
retains the right to terminate this Agreement automatically and without further notice, even if Franchisee has cured all prior monetary defaults.
19.04 Franchisor's Step-In Rights. In the event of any of the foregoing defaults, Franchisor may at its option exercise its Step-in-Rights as defined in Section 21. These Step-in-Rights shall be in addition to any other rights or remedies which Franchisor may have hereunder, at law or in equity.
20. OBLIGATIONS UPON TERMINATION
Upon termination or expiration, this Agreement and all rights granted hereunder to Franchisee shall forthwith terminate, and:
- 20.01 No Longer a Franchisee. Franchisee shall immediately cease to operate the Restaurant, and shall not thereafter, directly or indirectly, represent to the public or hold himself/herself/itself out as a present or former franchisee of Franchisor;
- 20.02 Cease Use of Marks. Franchisee shall immediately and permanently cease to use, by advertising or in any manner whatsoever, any equipment, format, improvements, methods, procedures, and techniques associated with the System; the name set forth on the Summary Page, and any Marks and distinctive trade dress and devices associated with the System. In particular, Franchisee shall cease to use, without limitation, all signs, furniture, fixtures, equipment, advertising and promotional materials, stationery, forms and any other articles which display the Marks or trade dress associated with the System; provided, however, that this paragraph shall not apply to the operation by Franchisee of any other franchise under the System which may be granted by Franchisor to Franchisee.
- 20.03 De-Identify Premises. Franchisee agrees, that upon termination or expiration, Franchisee shall de-identify the Premises and shall not, in the event Franchisee continues to operate or subsequently begins to operate the Restaurant, not to use any reproduction, counterfeit, copy or colorable imitation of the Marks either in connection with such other business or the promotion thereof, which is likely to cause confusion, mistake or deception, or which is likely to dilute Franchisor's exclusive rights in and to the Marks and further agrees not to utilize any trade dress or designation of origin or description or representation which falsely suggests or represents an association or connection with Franchisor so as to constitute unfair competition.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, several actions can lead to a default or breach of the Franchise Agreement. These include breaching any agreement between the franchisee (or their approved affiliates/guarantors) and Bananas Smoothies Frozen Yogurt. This means that if a franchisee, an approved affiliate, or a guarantor violates any agreement with the franchisor, it constitutes a default under the Franchise Agreement, potentially leading to termination at the franchisor's discretion. Conversely, any breach of the Franchise Agreement by the franchisee, their affiliates, or guarantors is considered a default under all other agreements with Bananas Smoothies Frozen Yogurt.
Furthermore, the document specifies that repeated late payments can trigger termination. If a franchisee is late in paying royalties or any other monies due to Bananas Smoothies Frozen Yogurt or its affiliates two times within a twelve-month period, the franchisor reserves the right to terminate the agreement automatically, even if the franchisee has rectified all previous monetary defaults.
Additionally, failure to comply with any provision of the Area Development Agreement, or any other agreement with Bananas Smoothies Frozen Yogurt, constitutes a default, even if the franchisee corrects the failure after receiving notice. Repeated failures to comply with agreements, even if corrected, can also lead to default. Finally, if a franchisee receives a termination notice for a Franchise Agreement or terminates a Franchise Agreement themselves, it is considered a default under the Area Development Agreement.
These provisions highlight the importance of strict compliance with all agreements and timely payments to maintain good standing with Bananas Smoothies Frozen Yogurt. A prospective franchisee should carefully review all agreements and ensure they understand the terms and conditions to avoid potential defaults and termination of their franchise.