What is the permitted use of any Lease entered into by Franchisee for a Bananas Smoothies Frozen Yogurt franchise?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Any Lease entered into by Franchisee shall be exclusively for the operation of the Restaurant, and shall provide that upon termination or expiration of the franchise, for any reason, Franchisor shall have the right, but not the obligation, to be assigned and to assume the Lease, and replace Franchisee as tenant. Any Lease entered into by Franchisee shall further prohibit Franchisee from subleasing or assigning all or any part of Franchisee's occupancy rights, or extending the term of or revising the Lease, without prior written consent. Franchisee shall, upon the exercise of that right by Franchisor, be fully indemnified by Franchisor from all liability for future rent and all other future obligations under the Lease (though not from any liability for unpaid rent or any then existing liabilities or obligations under the lease). Franchisee agrees to execute any documents required to assign the Lease to Franchisor or to a designee of Franchisor.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, any lease entered into by a franchisee must be exclusively for the operation of the Bananas Smoothies Frozen Yogurt restaurant. The lease should also stipulate that upon termination or expiration of the franchise agreement, for any reason, Bananas Smoothies Frozen Yogurt has the right, but not the obligation, to be assigned and assume the lease, replacing the franchisee as the tenant.
Furthermore, the lease must prohibit the franchisee from subleasing or assigning any part of their occupancy rights, or from extending or revising the lease terms, without obtaining prior written consent from Bananas Smoothies Frozen Yogurt. If Bananas Smoothies Frozen Yogurt exercises its right to assume the lease, the franchisee will be fully indemnified by Bananas Smoothies Frozen Yogurt from all future rent liability and other future obligations under the lease, except for any unpaid rent or existing liabilities at the time of the lease transfer.
In practical terms, this means a franchisee's lease is specifically tied to running the Bananas Smoothies Frozen Yogurt business and cannot be used for other ventures. Bananas Smoothies Frozen Yogurt maintains control over the lease, providing them with an option to take over the location if the franchise agreement ends. This protects Bananas Smoothies Frozen Yogurt's interests and ensures continuity of the brand's presence, while also potentially relieving the franchisee of future lease obligations under certain conditions.