What obligation does the franchisee of Bananas Smoothies Frozen Yogurt assume regarding the operation of the restaurant?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) The Franchisee may operate the Restaurant only at the Premises. The Franchisee may sell to anyone, at retail only, prepared food of the character, and meeting the quality standards contemplated in this Agreement, provided that all sales are from the Premises. Franchisee may not open or operate from another location, and may not engage in any other type of business at or from the Premises.
(i) Divert, or attempt to divert any business, or customer of the Restaurant, to any competitor by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the good will associated with the Franchisor's proprietary marks and the System; or
(ii) Own, maintain, advise, help, invest in or make loans to, be employed by, engage in or have any interest in any business (including any business operated by Franchisee prior to entry into the Agreement) that operates a restaurant which, in whole or in part, sells the same or similar types of food and beverages as Franchisor or any of its franchisees including without limitation that which is sold by Franchisee at the Restaurant and specifically including salads, wraps, paninis, frozen yogurt and smoothies, including, but not limited to, any of the specific items set forth in Exhibit "One H".
Franchisee may not make any express or implied agreements, warranties, guarantees or representations or incur any debt in Franchisor's name or on Franchisor's behalf or represent that the relationship of the parties hereto is anything other than that of independent contractors. Franchisor will not be obligated by or have any liability under any agreements made by Franchisee with any third party or for any representations made by Franchisee to any third party. Franchisor will not be obligated for any damages to any person or property arising directly or indirectly out of the operation of Franchisee's business hereunder.
24.03 Indemnification. It is understood and agreed that nothing in this Agreement authorizes Franchisee to make any contract, agreement, warranty or representation on Franchisor's behalf, or to incur any debt or other obligation in Franchisor's name, and that Franchisor shall in no event assume liability for, or be deemed liable hereunder as a result of, any such action, or by reason of any act or omission of Franchisee in its conduct of the Restaurant or any claim or judgment arising therefrom against Franchisor. Franchisee shall indemnify and hold Franchisor harmless against any and all such claims arising directly or indirectly from, as a result of, or in connection with Franchisee's operation of the Franchised Business as well as the costs, including attorneys' fees, of defending against them. Franchisee shall indemnify, defend and hold harmless Franchisor, its affiliates and all their respective shareholders, members, directors, officers, employees, agents, successors and assigns against, and reimburse them for, any claim, liability, obligation, actual and consequential damages or taxes asserted against or imposed on any of the foregoing indemnified parties arising directly or indirectly from the development or operation of the Restaurant, other than liabilities caused solely by Franchisor's own gross negligence or willful action and all other liabilities arising from labor and employment law violations or liability for acts or omissions of Franchisee's employees.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, franchisees have specific obligations regarding the operation of their restaurants. The franchisee is required to operate the restaurant exclusively at the designated premises and is limited to selling prepared food that aligns with the quality standards outlined in the franchise agreement. Sales must be retail only and conducted from the premises. Franchisees are prohibited from operating from any other location or engaging in any other type of business at or from the designated premises.
Bananas Smoothies Frozen Yogurt franchisees are prohibited from diverting business or customers to competitors or performing any actions that could harm the goodwill associated with the franchisor's marks and the system. They cannot own, maintain, advise, invest in, or be employed by any business that operates a restaurant selling the same or similar types of food and beverages as Bananas Smoothies Frozen Yogurt, including salads, wraps, paninis, frozen yogurt, and smoothies.
The FDD also states that franchisees must operate as independent contractors and must inform the public of this status. They cannot make agreements or incur debts on behalf of the franchisor. Franchisees are responsible for indemnifying and holding the franchisor harmless from any claims arising from the operation of the franchised business. This includes covering costs and attorney's fees associated with defending against such claims. These obligations remain in effect even after the termination or expiration of the franchise agreement.