What is the dependency for a Bft developer to exercise their Development Rights?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
e, Indemnification, and Acknowledgment (the "Guaranty"), the current form of which is attached as Exhibit B hereto; (4) the only business Developer will own or operate during the Term will be the exercise of the rights granted to it under this Agreement and any other agreement between it and Franchisor or its successors and assigns; and (5) at
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Franchisor's request, Developer will furnish Franchisor true and correct copies of all documents regarding Developer's formation, existence, standing, and governance.
2. GRANT OF DEVELOPMENT RIGHTS
A. Grant and Term. Franchisor grants Developer the Development Rights, which must be exercised in strict compliance with this Agreement. The Development Rights may be exercised from the Effective Date and, unless sooner terminated as provided herein, continuing through the earlier of (1) the date on which the last Studio, which is required to have conducted its Soft Opening (as defined in Section 2.C below) in order to satisfy the Development Schedule, conducts its Soft Opening pursuant to an executed Franchise Agreement, or (2) the last day of the last Development Period (defined in Section 2.C) (collectively, the "Term"). Developer accepts the grant of the Development Rights and agrees to, at all times, faithfully, honestly, and diligently perform its obligations under this Agreement and fully exploit the Development Rights during the Term and throughout the entire Development Area. Developer may not subcontract or delegate to any third parties any of its rights or obligations under this Agreement.
B. Development Area; Reservation Of Rights. The Development Rights may only be exercised for Studios to be located in the Development Area identified on Exhibit A hereto. As long as Developer is in compliance with this Agreement and except with respect to Non-Traditional Locations (defined below), Franchisor will not, during the Term, (1) operate, or grant the right to anyone else to operate, a Studio within the Development Area, or (2) grant Development Rights to anyone else to develop Studios within the Development Area. A "Non-Traditional Location" is (a) any location that is situated within or as part of a larger venue or facility and, as a result, is likely to draw the predominance of its customers from those persons who are using or attending events in the larger venue or facility (for example, "big box" gyms and/or fitness facilities, cruise ships, military bases, shopping malls, airports, sports facilities and stadiums, industrial or office complexes, hotels, train stations and other transportation facilities, travel plazas, casinos, hospitals, theme parks, convention centers, colleges/universities, multi-unit residential properties, and other similar captive market locations**)**.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Development Rights granted to a developer must be exercised in strict compliance with the Multi-Unit Agreement. These rights are available from the Effective Date of the agreement and continue until the earlier of two conditions: either the date the last studio required by the Development Schedule conducts its soft opening, or the last day of the final Development Period. The developer is expected to diligently perform their obligations under the agreement and fully utilize the Development Rights throughout the Development Area during the Term.
The agreement explicitly prohibits the developer from subcontracting or delegating any of their rights or obligations to third parties. This ensures that the developer remains directly responsible for fulfilling the terms of the agreement and maintaining the standards set by Bft.
Furthermore, Bft grants these Development Rights to the developer in reliance on the developer's character, skills, aptitude, business ability, and financial capacity. This underscores the importance of the Application Materials provided by the developer, which Bft uses to assess their suitability. The developer's rights and duties are considered personal, and any transfer of interest requires Bft's approval, highlighting the personal nature of the agreement between Bft and the developer.