Does Bananas Smoothies Frozen Yogurt customarily guarantee a franchisee's notes, leases, or other obligations?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not offer direct or indirect financing to you nor do We or any of Our affiliates receive any direct or indirect payments or other consideration from any person for the placement of financing with a lender, although we cooperate with the Small Business Administration approved lenders and will work with You to help You process SBA funding through any approved lender. We do not customarily guarantee any of your notes, leases, or other obligations to third parties although our affiliate has, from time to time, given certain limited guaranties on leases (but there is no obligation to do so). In certain limited situations, our affiliate may provide a limited guaranty of your lease with a third party, if you have acceptable credit and it is the only way to obtain an exceptional location.
Source: Item 10 — FINANCING (FDD pages 37–38)
What This Means (2025 FDD)
According to Bananas Smoothies Frozen Yogurt's 2025 Franchise Disclosure Document, Item 10 clarifies their position on guaranteeing franchisee obligations. Bananas Smoothies Frozen Yogurt does not offer direct or indirect financing to franchisees, nor do they receive payments for financing placement. While they cooperate with Small Business Administration (SBA) approved lenders and will assist franchisees in processing SBA funding, they do not typically guarantee a franchisee's financial obligations.
However, there's an exception. Bananas Smoothies Frozen Yogurt's affiliate has, on occasion, provided limited lease guarantees, but they are under no obligation to do so. In specific cases, the affiliate might offer a limited lease guaranty if the franchisee has acceptable credit and it's essential for securing an exceptional location.
This means that a prospective Bananas Smoothies Frozen Yogurt franchisee should not rely on the franchisor to guarantee their notes, leases, or other obligations. Financing will largely depend on the franchisee's creditworthiness and the availability of commercial credit. While there is a possibility of a limited lease guaranty in certain situations, it is not a standard practice and depends on factors like credit and location.