Can a Bananas Smoothies Frozen Yogurt Developer contest tax liability?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
Payment of all such taxes is solely Developer's responsibility.
In the event of a bona fide dispute as to Developer's liability for taxes, Developer may contest liability in accordance with applicable law.
In no event will Developer permit a tax sale, seizure, or attachment to occur against any of Developer's assets, including this Agreement.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, a Developer can contest their tax liability. The FDD states that the Developer is responsible for paying all taxes related to their business. However, if there is a legitimate disagreement regarding the Developer's tax liability, the Developer has the right to contest it in accordance with the applicable laws.
However, the Bananas Smoothies Frozen Yogurt Developer cannot allow a tax sale, seizure, or attachment to occur against any of their assets, including the Area Development Agreement. This means that while the Developer can dispute the tax liability, they must take steps to prevent any enforcement actions that could jeopardize their business or agreement with the franchisor.
This clause protects the Bananas Smoothies Frozen Yogurt franchisor by ensuring that tax disputes do not lead to disruptions in the Developer's operations or potential loss of assets that could affect the franchise system. It is a fairly standard clause in franchise agreements, allowing for legal challenges to tax assessments while safeguarding the ongoing viability of the franchise.