Under what circumstances might Bananas Smoothies Frozen Yogurt terminate the Area Development Agreement?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to terminate an Area Development Agreement if you default under its terms or under the terms of any Franchise Agreement or other agreement you have with us. If you do not achieve the Minimum Development Quota specified in the Area Development Agreement, we, in our sole control, may:
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- terminate the Area Development Agreement;
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- grant you an extension under the Development Schedule for such time period as we specify for a non-refundable extension fee equal to the balance of the Franchise Fees for the number of franchised units that are to be opened under the Development Schedule but are not yet under construction and are behind the required timetable of the Development Schedule; or
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- reduce the Development Area and the Development Schedule to a size and magnitude that we estimate you are capable of operating otherwise in accordance with the Area Development Agreement.
Source: Item 12 — TERRITORY (FDD pages 43–46)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt Franchise Disclosure Document, Bananas Smoothies Frozen Yogurt has the right to terminate the Area Development Agreement if the franchisee defaults on the terms outlined in the agreement, any Franchise Agreement, or any other agreement with them.
Another cause for termination is if the franchisee fails to meet the Minimum Development Quota specified in the Area Development Agreement. If the franchisee does not meet this quota, Bananas Smoothies Frozen Yogurt has the option to terminate the agreement, grant an extension with a non-refundable fee, or reduce the development area and schedule to a size that Bananas Smoothies Frozen Yogurt believes the franchisee can manage.
The non-refundable extension fee would be equal to the balance of the Franchise Fees for the number of franchised units that are to be opened under the Development Schedule but are not yet under construction and are behind the required timetable of the Development Schedule. This means that a franchisee could potentially lose their development rights, or be forced to pay a substantial fee to maintain them if they fall behind schedule.