What does the Development Fee cover for Bananas Smoothies Frozen Yogurt franchisees?

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.

4. DEVELOPMENT FEE.

• 4.1 Amount and Consideration. When Developer signs this Agreement, Developer agrees to pay to us a development fee (the "Development Fee"). The Development Fee depends on the number of EYB Concepts to be opened and what EYB Concepts are to be developed. For example, if Developer were to develop 2 Green Leaf's Beyond Great Salads restaurants (in the Continental U.S.), then the total Development Fee is $50,000 [$25,000 for the first location + $25,000 for the second location]. Thus, the upfront Development Fee paid when signing this Agreement is $37,500 ($25,000 for the first restaurant and $12,500 for the second restaurant (1/2 of $25,000). The Development Fee constitutes payment only for the rights we grant you under this Agreement. The Development Fee is non-refundable and is fully earned by Franchisor on receipt.
• 4.2 Franchise Fees. At the time of executing the franchise agreement for each EYB Concept developed under the Area Development Agreement after the first one, Developer is required to pay the balance of the Franchise Fee. Thus, using the example in Section 4.1 above, after paying the initial $37,500 Development Fee, the second restaurant's franchise fee balance is $12,500 (the remaining ½ of $25,000). These fees are non-refundable and are fully earned by Franchisor on receipt.

5. SITE SELECTION/FRANCHISES.

Subject to the provisions of this Agreement, Franchisor will grant franchises to Developer for the operation of EYB Concepts to be located within the Development Area on the following conditions:

• 5.1 Site Reports. Developer agrees to submit to Franchisor a complete report (containing such information and collateral materials as Franchisor requires from time to time) for each Site at which Developer proposes to establish and operate an EYB Concept, before Developer acquires any interest in it (by lease or purchase). A complete site report should contain demographic, commercial and market feasibility studies, a site plan, photographs and such other information as Franchisor determines appropriate periodically. Each Site Developer submits must be based on Developer's belief that it conforms to the site criteria Franchisor establishes from time to time.
• 5.2 Site Evaluation. Franchisor will evaluate all proposed Sites and all Sites are subject to Franchisor's prior written acceptance. In evaluating a Site that Developer proposes, Franchisor will consider such matters as demographic characteristics of the proposed site, traffic patterns, land use and zoning, licensing and regulatory concerns, residential and recreational quality, parking, character of the neighborhood, renovation and construction concerns, competition from other facilities in the area, the proximity to other facilities, the nature of other businesses and EYB Concepts in proximity to the Site and other commercial and residential characteristics (including the purchase price, rental obligations and other lease or acquisition terms for the proposed Site), and the size, appearance and other physical characteristics of the Site. Developer agrees to obtain Franchisor's prior written consent to the Site before Developer signs any lease for, or a binding purchase agreement for, the proposed Site.
• 5.3 Site Acceptance. Franchisor may withhold consent to a Site for any reason Franchisor deems to be based on its good faith business judgment. Franchisor will, by delivery of written notice to Developer, accept or reject each Site proposed by you for the operation of an EYB Concept.

Franchisor agrees to exert commercially reasonable efforts to notify you within 30 days after Franchisor has received the complete site report and other materials Franchisor has requested.

• 5.4 Effect of Acceptance. Franchisor's acceptance of the Site (including its location, appearance and size) indicates only that Franchisor believes it falls within the acceptable criteria Franchisor has established at that time. Developer acknowledges and agrees that:
• (a) Franchisor's acceptance of the Site does not imply, assure, guaranty, warrant or predict profitability or success, express or implied;
• (b) application of criteria that have been effective with respect to other Sites may not be predictive of the potential for all Sites and that, subsequent to Franchisor's acceptance of a Site, demographic and/or economic factors included in, or excluding from, Franchisor's criteria could change, thereby altering the potential of a Site;
• (c) the uncertainty and instability of such criteria are beyond Franchisor's control and Franchisor is not responsible for the failure of a Site approved by Franchisor to meet expectations as to potential revenue or operational criteria;

Source: Item 23 — RECEIPT (FDD pages 58–231)