What must a Bft developer establish to the Franchisor's satisfaction regarding the proposed studio?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may refuse to issue and enter into a Franchise Agreement if (a) in its sole discretion, it has not approved Developer's proposed affiliate, (b) Developer has not established to Franchisor's satisfaction that it has the operational and financial capacity to develop and operate the proposed Studio, (c) Developer and its affiliates are not then in compliance with any agreements to which they are a party with Franchisor or its affiliates, (d) Developer or its affiliates have failed to pay any amounts owed to Franchisor or its affiliates during the preceding 12 months, or (e) Developer or its approved affiliates and their respective owners fail to sign and return to Franchisor the Franchise Agreement and all ancillary agreements and required fees within 15 days following Franchisor's delivery of the execution of copy of the Franchise Agreement to Developer or its approved affiliate.
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, a developer must demonstrate to Bft's satisfaction that they possess the operational and financial capacity to develop and operate the proposed studio. This requirement is a condition for Bft to issue and enter into a Franchise Agreement.
Bft may refuse to issue a Franchise Agreement if it has not approved the developer's proposed affiliate or if the developer and its affiliates are not in compliance with any agreements with Bft or its affiliates. Additionally, failure to pay any amounts owed to Bft or its affiliates during the preceding 12 months or failure to sign and return the Franchise Agreement and all ancillary agreements and required fees within 15 days following Bft's delivery of the execution copy can also result in refusal.
This stipulation ensures that Bft only grants franchises to developers who are financially stable and operationally competent, which protects the brand's reputation and the interests of other franchisees. It is common practice in franchising to assess a franchisee's capabilities before awarding a franchise, but the specific criteria and processes can vary among franchisors. A prospective Bft franchisee should carefully review these requirements and ensure they can meet them before investing in a franchise.