Does the Bft agreement restrict a person from communicating with government agencies about possible violations of law?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, nothing in this Agreement or any other agreement with Franchisor restricts or prohibits any person from initiating communications directly with, responding to any inquiries from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or from filing a claim or assisting with an investigation directly with a self-regulatory authority or a government agency or entity, including the U.S. Securities and Exchange Commission, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. No person needs the prior authorization of Franchisor to engage in conduct protected by the preceding sentence, and no person needs to notify Franchisor that such person has engaged in such conduct.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the franchise agreement does not restrict anyone from communicating with government agencies regarding potential legal violations. Specifically, the agreement does not prohibit initiating communications, responding to inquiries, providing testimony or confidential information, or reporting possible violations of law or regulation to government agencies or self-regulatory authorities, including the U.S. Securities and Exchange Commission.
This extends to making disclosures protected under whistleblower provisions of state or federal law. A franchisee or any other person is not required to obtain prior authorization from Bft to engage in such conduct, nor are they required to notify Bft that they have done so.
This clause protects franchisees and others affiliated with Bft from retaliation for reporting illegal activities or cooperating with government investigations. This type of provision is increasingly common in franchise agreements to ensure compliance with whistleblower protection laws and to promote transparency and ethical behavior within the franchise system.