Under what conditions will Bananas Smoothies Frozen Yogurt offer a franchise agreement to a developer?

We grant to persons who meet our qualifications and are willing to undertake the investment and effort, the right to develop and operate multiple EYB Concepts located within a defined geographic area.

• (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.

Franchisor understands and agrees that we may modify the Franchise Agreement from time to time; however, any modifications during the term of this Agreement will not vary the amount of the Franchise Fee, royalty fees or other fees to be paid to Franchisor.

Developer (or an affiliate) must sign and deliver such Franchise Agreement to Franchisor within 30-days after our delivery of the Franchise Agreement to Developer, along with Developer's payment of the applicable Franchise Fee.

If Developer (or your affiliate) do not timely sign and return such Franchise Agreement and tender payment of the Franchise Fee Franchisor may revoke Franchisor's offer to grant Developer a franchise to operate an EYB Concept at such proposed Site.

Source: Item 23 — RECEIPT (FDD pages 58–231)