What constitutes a 'direct or indirect Transfer' of a Bft franchise that is unauthorized?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
evails, the period of non-competition shall be extended for an additional period equal to the period of time that enforcement of this Article 13 is delayed.
- B. Franchisee agrees that the provisions of this covenant not to compete are reasonable. If, however, any court should find this Article 13 or any portion of this Article 13 to be unenforceable and/or unreasonable, the court is authorized and directed to reduce the scope or duration (or both) of the provision(s) in issue to the extent necessary to render it enforceable and/or reasonable and to enforce the provision so revised.
- C. Franchisor shall have the right, in Franchisor's discretion, to reduce the scope of any covenant not to compete set forth in this Agreement, or any portion thereof, without Franchisee's consent, effective immediately upon receipt by Franchisee of written notice thereof, and Franchisee shall comply with any covenant as so modified.
14. TRANSFER OF INTEREST
- 14.1 Franchisor's Consent Required. All rights and interests of Franchisee arising from this Agreement are personal to Franchisee and except as otherwise provided in this Article 14, Franchisee shall not, without Franchisor's prior written consent, voluntarily
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, a 'Transfer' of the franchise is defined broadly and requires the franchisor's prior written consent unless explicitly stated otherwise in Article 14 of the franchise agreement. This includes any voluntary or involuntary action, whether by law or other means, to sell, assign, transfer, pledge, or encumber the franchisee's interest in the agreement. It extends to the franchise license, the studio's assets, any rights under the agreement, the studio's lease, or control/management of the studio. Any transfer without Bft's consent is considered null and void.
For franchisees that are corporations, limited liability companies, partnerships, or groups of individuals, any assignment or new issuance of ownership interests that alters the percentages shown on Exhibit 1 of the agreement must be promptly reported to Bft. Such changes, whether occurring through a single transaction or a series of transactions, also constitute a Transfer under Article 14. This means even internal changes in ownership structure must be disclosed and are subject to the transfer provisions.
Any proposed Transfer is subject to Bft's right of first refusal, giving them the option to purchase the franchise before it is sold to a third party. This level of control allows Bft to maintain standards and consistency across its franchise network by carefully vetting and approving any changes in ownership or control. Prospective franchisees should be aware that obtaining consent for a transfer is not guaranteed and depends on meeting specific conditions set by Bft.