What does each undersigned owner waive regarding the Bananas Smoothies Frozen Yogurt guaranty?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned waives: (a) acceptance and notice of acceptance by EYB of the foregoing undertakings; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right he or she may have to require that an action be brought against Developer or any other person as a condition of liability; and (e) any and all other notices and legal or equitable defenses to which he or she may be entitled.
Source: Item 23 — RECEIPT (FDD pages 58–231)
What This Means (2025 FDD)
According to the 2025 Bananas Smoothies Frozen Yogurt FDD, each owner who signs the guaranty waives certain rights and notices related to the Developer's obligations. Specifically, they waive: acceptance and notice of acceptance by Everything Yogurt Brands (EYB) of the guaranty, notice of demand for payment or nonperformance, protest and notice of default, any right to require that an action be brought against the Developer or any other person before being held liable, and any other legal or equitable defenses they may have. This waiver is part of the Owners' Personal Guaranty of Developer's Obligations, an exhibit to the Area Development Agreement.
In practical terms, this means that if the Developer (the entity entering into the Area Development Agreement) fails to meet its financial or performance obligations, Everything Yogurt Brands can immediately pursue the individual owners who signed the guaranty without first notifying them, demanding payment from the Developer, or taking any legal action against the Developer. The owners are giving up their right to assert common defenses or procedural steps that might otherwise protect them.
This type of personal guaranty is a common practice in franchising, especially for new or smaller franchisees. Franchisors like Bananas Smoothies Frozen Yogurt use it to ensure that there are individuals with personal assets at stake, which can provide a stronger incentive for the franchisee to uphold their commitments under the Area Development Agreement. Prospective franchisees should carefully consider the implications of signing such a guaranty, as it can expose their personal assets to risk if the Bananas Smoothies Frozen Yogurt business does not succeed.
It is important for potential Bananas Smoothies Frozen Yogurt franchisees to seek legal counsel to fully understand the scope and implications of the Owners' Personal Guaranty before signing it. They should also assess their own financial situation and risk tolerance to determine whether they are comfortable with the potential liabilities associated with the guaranty.