Must the manager of a Bananas Smoothies Frozen Yogurt restaurant have an equity interest in the franchised business?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
You (or your Manager) shall exert your full-time and best efforts during business hours to the management of your restaurant. Your restaurant at all times must be under the direct supervision of a full time Manager (who may be you) who has completed our training program to our satisfaction. Your Manager need not have an equity interest in the franchised business.
Any person actively involved in the management of your franchise must enter into a confidentiality and non-competition agreement" which shall be approved first by us. If after a confidentiality and non-competition agreement is entered into you have reason to believe that any such person has violated the provisions of the "Confidentiality and Non-Competition Agreement", you must notify us immediately and cooperate with us to protect us against infringement or other unlawful use of the proprietary marks or the System.
Your Franchised Business must be under the direct on-premises supervision of a manager who has satisfactorily completed the required initial training as described in Item 11. We do not require that you act as manager of the Franchised Business. We recommend that you personally participate in the actual management and operation of the Franchised Business. If you are a corporation, we also require all officers, directors, and holders of a beneficial interest of five percent or more of the securities of the corporation and of any corporation directly or indirectly controlling a corporate or partnership franchisee, and to the general partners and any limited partner of a partnership or member of a limited liability company franchisee, to devote requisite time, energy, and best efforts to the management and operation of the Franchised Business and to guarantee the obligations under the Franchise Agreement. We also require completion and attendance at all required training and follow-up requirements specified in the Confidential Operations & Training Manual and we require that
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 48–49)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, the manager of a Bananas Smoothies Frozen Yogurt franchise is not required to have an equity interest in the business. The FDD states that the restaurant must be under the direct supervision of a full-time manager who has completed the franchisor's training program. This manager can be the franchisee themselves or someone they employ.
However, Bananas Smoothies Frozen Yogurt requires that any person actively involved in the management of the franchise must enter into a confidentiality and non-competition agreement approved by them. If the franchisee believes that this person has violated the agreement, they must notify Bananas Smoothies Frozen Yogurt immediately and cooperate to protect against infringement or unlawful use of the system's proprietary marks.
While Bananas Smoothies Frozen Yogurt does not mandate equity for the manager, they recommend that the franchisee personally participate in the actual management and operation of the franchised business. If the franchisee is a corporation, Bananas Smoothies Frozen Yogurt requires all officers, directors, and holders of a beneficial interest of five percent or more of the securities to devote requisite time, energy, and best efforts to the management and operation of the Franchised Business and to guarantee the obligations under the Franchise Agreement.