What is the consequence if a Bft franchisee or its principals are convicted of a felony?

According to Bft's 2025 Franchise Disclosure Document, if a franchisee or any of its principal officers, directors, partners, or managing members is convicted of or pleads no contest to a felony or other crime or offense that adversely affects the reputation of the Bft system or the goodwill associated with its marks, it constitutes grounds for termination of the franchise agreement. This means Bft has the right to terminate the franchise agreement if such a conviction or plea occurs.

This provision highlights the importance Bft places on maintaining its brand reputation and goodwill. A criminal conviction, particularly a felony, involving the franchisee or its leadership could significantly damage the public's perception of the Bft brand. The FDD specifies that the crime must "adversely affect the reputation of the System or the goodwill associated with the Marks," indicating that Bft will likely assess the nature and impact of the crime when considering termination.

For a prospective Bft franchisee, this clause underscores the need for all principals to maintain high ethical and legal standards. A past or future felony conviction could jeopardize the franchise investment. Furthermore, the inclusion of a "no contest" plea as equivalent to a conviction suggests that Bft is concerned with the underlying conduct, not just the formal legal outcome. Franchisees should ensure they and their principals understand the implications of this clause and maintain a clean legal record to avoid potential termination of their franchise agreement.

It is important to note that the FDD does not define what constitutes an action that would "adversely affect the reputation of the System or the goodwill associated with the Marks," so that determination would be made by Bft. A prospective franchisee should seek clarification from Bft regarding what types of convictions or pleas would trigger this termination clause.