What is the connection between the royalty fees paid to Bft, as described in Item 6, and the pre-opening assistance provided by the franchisor in Item 11?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Throughout the Term, Franchisee agrees to pay Franchisor, weekly, without setoff, credit or deduction of any nature, a royalty fee equal to seven percent (7%) of the Gross Sales (as that term is defined in Section 5.3, below) generated by the Studio over the immediately preceding week (the "Royalty" or "Royalty Fee").
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, there is no direct connection described between the royalty fees outlined in Item 6 and the pre-opening assistance detailed in Item 11. Item 11 describes the pre-opening assistance that Bft provides to franchisees, such as the Initial Training Program for the franchisee (or their Operating Principal) and Designated Manager, as well as Pre-Opening Instructor Training for authorized instructors. This training is typically provided within thirty days before the studio opening, subject to the availability of Bft's training personnel. Bft also provides access to the Learning Management System, which includes specifications, standards, procedures, and the operations manual.
Item 11 also mentions that Bft may send representatives to the studio's soft opening to provide assistance and recommendations, as well as additional training. Bft may require the franchisee to cover the costs incurred by these representatives. Furthermore, after the soft opening, new authorized instructors will complete Pre-Opening Instructor Training with a Head Coach, and the Fundamentals Training Program will continue to be provided virtually at the then-current Fundamentals Tuition Fee. Bft may also require the franchisee to attend up to five days of additional training each year, without charging a training fee for required training.
Item 6, however, generally describes the services Bft provides, including general guidance for opening, such as consulting on the display of marks, layout and design, procurement of equipment, and managing construction or remodeling. It also covers training-related programs and obligations. Item 5.2 specifies that franchisees must pay Bft a weekly royalty fee equal to 7% of the Gross Sales generated by the studio. While both items discuss obligations and services related to the franchise operation, the FDD does not explicitly link the pre-opening assistance to the ongoing royalty fee. The royalty fee is a standard ongoing payment based on revenue, while the pre-opening assistance seems to be a set of services provided to help the franchisee launch the business.