Are changes in the Operating Principal(s) of a Bft franchise subject to any articles in the franchise agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) Transfer of All Ownership Interests. If an owner of Franchisee ceases to be an owner of Franchisee for any reason, the former owner shall comply with the provision of this Section 13.1.B as though this Agreement were terminated as of the date on which the owner ceased to be an owner.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the franchise agreement addresses the scenario where an owner of the Franchisee ceases to be an owner for any reason. In such cases, the former owner must comply with specific provisions outlined in Section 13.1.B of the agreement, as if the agreement were terminated on the date the owner ceased to be an owner. These provisions relate to post-termination obligations.
Specifically, Section 13.1.B includes covenants regarding non-compete and non-solicitation. The former owner is prohibited from engaging in franchising activities that compete with Bft or being involved with any competing business within certain geographic restrictions for a period of two years after ceasing to be an owner. These restrictions apply to locations where Bft has offered or sold franchises and within a ten-mile radius of the Authorized Location or any other Bft studio.
This clause ensures that former owners do not leverage their knowledge and experience gained as a Bft franchisee to unfairly compete with the Bft system after they are no longer affiliated with the franchise. Prospective franchisees should carefully consider these restrictions, as they could significantly impact their future business endeavors if they decide to leave the Bft franchise system.