What is the purpose of the SBA Addendum to the Franchise Agreement for Bananas Smoothies Frozen Yogurt franchisees?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
-assisted financing.
EMPLOYMENT
• Franchisor will not directly control (hire, fire or schedule) Franchisee's employees. For temporary personnel franchises, the temporary employees will be employed by the Franchisee not the Franchisor.
As to the referenced Franchise Agreement, this Addendum automatically terminates when SBA no longer has any interest in any SBA-assisted financing provided to the Franchisee.
Except as amended by this Addendum, the Franchise Agreement remains in full force and effect according to its terms.
Franchisor and Franchisee acknowledge that submission of false information to SBA, or the withholding of material information from SBA, can result in criminal prosecution under 18 U.S.C. 1001 and other provisions, including liability for treble damages under the False Claims Act, 31 U.S.C. §§ 3729 - 3733.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, the SBA Addendum to the Franchise Agreement addresses the affiliation between Bananas Smoothies Frozen Yogurt and the franchisee when the franchisee receives SBA-assisted financing. The addendum automatically terminates when the SBA no longer has interest in the franchisee's SBA-assisted financing. The Franchise Agreement remains in full effect, except as amended by the addendum.
Bananas Smoothies Frozen Yogurt and the franchisee must meet all SBA eligibility requirements. Both parties acknowledge that submitting false information or withholding material information from the SBA can result in criminal prosecution under 18 U.S.C. 1001, including liability for treble damages under the False Claims Act, 31 U.S.C. §§ 3729 - 3733.
This addendum ensures compliance with SBA regulations when a franchisee utilizes SBA-backed funding. It clarifies the relationship between Bananas Smoothies Frozen Yogurt and the franchisee in the context of the loan and outlines the potential legal ramifications of providing false information to the SBA. Prospective franchisees should carefully review this addendum with their legal counsel to fully understand their obligations and potential liabilities when seeking SBA financing.