Is the Bananas Smoothies Frozen Yogurt developer obligated to diligently perform their obligations?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.4 Effect of Failure. Strict Compliance with the Development Schedule is the essence of this Agreement. If Developer does not timely meet the Minimum Development Quota as of the end of any Development Period shown on the Development Schedule, Developer will be in default of Developer's obligations under this Agreement. If such a default occurs, it will constitute a material breach of this Agreement and Franchisor may then, in its sole discretion, elect to:
- (a) terminate this Agreement;
- (b) have the right to operate (directly or through affiliates) or grant franchises for the operation of Green Leaf's Restaurants within the Development Area;
- (c) grant Developer an extension under the Development Schedule for such time period as Franchisor may specify at its sole option for a non-refundable extension fee equal to the balance of the Franchise Fees for the number of EYB Concepts that are to be opened and operated under the Development Schedule but are not yet open; or
(d) reduce the Development Area and the Development Schedule to a size and magnitude that Franchisor estimates Developer's capable of operating otherwise in accordance with this Agreement.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, strict compliance with the development schedule outlined in the Area Development Agreement is essential. Failure to meet the minimum development quota by the end of any development period constitutes a default, representing a material breach of the agreement. This breach allows the franchisor, Everything Yogurt Brands, LLC, to take several actions.
Specifically, Everything Yogurt Brands, LLC can elect to terminate the agreement, giving them the right to operate or grant franchises for Green Leaf's Restaurants within the designated development area. Alternatively, they may grant the developer an extension to the development schedule, but this comes with a non-refundable extension fee. This fee is equivalent to the balance of the franchise fees for the number of EYB Concepts that were supposed to be opened under the original development schedule but have not yet been. Lastly, the franchisor can reduce the development area and schedule to a size they deem the developer capable of managing while still adhering to the agreement.
These stipulations underscore the importance of the developer's commitment to fulfilling their obligations. The franchisor retains significant control and options in the event of a default, emphasizing the need for careful planning and execution on the part of the developer to avoid potential penalties or termination of the agreement. The personal guarantee further reinforces the developer's commitment, as owners are held personally liable for the developer's performance.