What is the 'Successor Agreement' for a Bananas Smoothies Frozen Yogurt franchise?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
2.2 Successor Rights and Conditions.
- (a) At the expiration of the term of this Agreement, if Developer and Franchisor both determine that additional EYB Concepts should be developed in the Development Area, Franchisor will offer Developer the right to enter into a successor area development agreement (a "Successor Agreement") if Developer meets all of the following conditions:
- (i) Developer agrees to further develop the Development Area in accordance with the Development Schedule that Developer and Franchisor agree upon and is established in the Successor Agreement;
- (ii) Developer (or any affiliate) is not in default of any provision of this Agreement, any Franchise Agreement, or any other agreement Developer (or an affiliate) has entered into with Franchisor;
- (iii) Developer signs and delivers to Franchisor the Successor Agreement (which will be our then-current form of Area Development Agreement), which may include different fees and performance criteria and schedules;
- (iv) Developer pays to Franchisor the Development Fee required by the Successor Agreement;
- (v) Developer signs and delivers to us the General Release then used by us and which form and content shall be attached to the then current form of Franchisor's disclosure document, of any and all claims against Franchisor and our officers, directors, employees, agents, affiliates, successors and assigns; and
- (vi) Developer has provided Franchisor with the most recent financial statements. Such financial statements present fairly the financial position of Developer at the dates indicated therein and the results of Developer's cash flow for the year then ended. Developer agrees to maintain at all times, during the term of the Successor Agreement sufficient working capital to fulfill all Developer's obligations under the Successor Agreement. Developer's financial statement has been prepared in conformity with generally accepted accounting principles applicable to the respective periods involved and, except as expressly described in applicable notice, applied on a consistent basis. No material liabilities, adverse claims, commitments or obligations of any nature exist as of the date of the Successor Agreement, whether accrued, unliquidated absolute, contingent or otherwise, which are not reflected as liabilities on the financial statements and your financial statements are acceptable to us, in our absolute sole discretion.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, a Successor Agreement is a new area development agreement offered to a developer at the expiration of their current agreement, granting them the right to continue developing the area.
To be eligible for a Successor Agreement, the developer must meet several conditions. First, both the developer and Bananas Smoothies Frozen Yogurt must agree that further development in the area is warranted. The developer must also commit to a new development schedule outlined in the Successor Agreement. Critically, the developer cannot be in default of any existing agreements with the franchisor. The developer must sign the Successor Agreement, which will be Bananas Smoothies Frozen Yogurt's current form of the Area Development Agreement and may include different fees, performance criteria, and schedules than the original agreement.
Furthermore, the developer is required to pay the development fee as specified in the Successor Agreement and provide a general release of all claims against Bananas Smoothies Frozen Yogurt. Finally, the developer must provide acceptable, up-to-date financial statements demonstrating sufficient working capital to meet their obligations under the Successor Agreement.
If the developer meets these conditions, Bananas Smoothies Frozen Yogurt may offer them a Successor Agreement, allowing them to continue expanding their Bananas Smoothies Frozen Yogurt business within the designated area. This ensures continued growth and adherence to the franchisor's standards and requirements.