Must a Bananas Smoothies Frozen Yogurt franchisee pay all outstanding obligations before transferring the franchise?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
sfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this
franchise without the prior written consent of Franchisor and provided that Franchisee shall first have complied with the conditions for transfer set forth in this Agreement to Franchisor's satisfaction. Any purported assignment or transfer, by operation of law or otherwise, not having the written consent of Franchisor shall be null and void and shall constitute a material breach of this Agreement, for which Franchisor may then terminate without opportunity to cure pursuant to Paragraph 19.02 of this Agreement and its subparagraphs.
- (b) Prior to the time of transfer, including transfer by a trustee in bankruptcy, Franchisor may, in its sole discretion, require that:
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- The proposed transferee is of good moral character, has a good credit rating, has reasonable and sound business experience equal to or greater than that of the Franchisee, has sufficient financial resources to operate the Restaurant and otherwise meets Franchisor's standards for franchisees;
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Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, a franchisee must pay all outstanding obligations to the franchisor before transferring the franchise. Specifically, prior to the time of transfer, the franchisor may require that the franchisee has paid in full and otherwise satisfied all obligations owing to Bananas Smoothies Frozen Yogurt at or prior to the closing of the transaction.
This condition ensures that Bananas Smoothies Frozen Yogurt receives all due payments and that the franchise is transferred in good financial standing. It protects the franchisor's financial interests and maintains the integrity of the franchise system.
In addition to settling all outstanding debts, the franchisee must also meet other conditions for transfer, such as obtaining the franchisor's written consent and ensuring the proposed transferee meets certain qualifications. These qualifications include good moral character, a good credit rating, sufficient business experience and financial resources, and the ability to operate the restaurant. The transferee may also be required to execute a written assignment assuming all of the franchisee's duties and obligations or execute a new Franchise Agreement. The franchisee may also have to execute a general release of any claims against Bananas Smoothies Frozen Yogurt, and the franchisor must approve the economic terms of the transfer. The franchisee will also have to pay a sales commission of eight percent (8%) of the gross selling price of the Restaurant, the franchise, and all related assets if Bananas Smoothies Frozen Yogurt obtained the purchaser (transferee) for the Franchisee.