What must a Bft Developer do if Franchisor accepts a proposed site?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor accepts a proposed Site, Developer (or its approved affiliate) must timely sign a separate Franchise Agreement for the Site as described in Section 2.E below.
- E. Execution of Franchise Agreements. Simultaneously with the execution of this Agreement, Developer (or its approved affiliate) must sign and deliver to Franchisor a Franchise Agreement and related documents representing the first Franchise that Developer is obligated to acquire under this Agreement. Developer (or its approved affiliate) must thereafter conduct its Soft Opening and operate a Studio according to the terms of that Franchise Agreement. Thereafter, once Franchisor has accepted a Site, and prior to signing a lease or otherwise securing possession of the Site, Developer (or its approved affiliate) must sign Franchisor's then-current form of Franchise Agreement (including, without limitation, all exhibits and attachments thereto) and related documents, the terms of which may differ substantially from the terms contained in the form of Franchise Agreement that Franchisor is using to grant Franchises on the Effective Date; provided, however, the Initial Franchise Fee that will be owed under each subsequent Franchise Agreement will be same amount as provided herein, unless reduced by Franchisor at its discretion. Each Franchise Agreement will govern the development and operation of the Studio at the accepted Site identified therein. 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.
Expiration or termination of this Agreement does not impact the continued existence of any Franchise Agreements that are, as of such time, already fully executed unless, in the case of termination, the grounds for termination are also bases for termination under the Franchise Agreements and such Franchise Agreements are expressly terminated.
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, if Bft accepts a proposed site from a Developer, the Developer (or its approved affiliate) is required to sign a separate Franchise Agreement for that specific site. This action must be completed in a timely manner, as outlined in Section 2.E of the agreement. Furthermore, before signing a lease or securing possession of the site, the Developer (or its approved affiliate) must sign Bft's current form of Franchise Agreement, including all exhibits and attachments.
This requirement ensures that each location developed under the multi-unit agreement is governed by its own individual Franchise Agreement. This allows Bft to maintain control over the standards and operations of each studio. The Franchise Agreement signed at this stage will dictate the terms for developing and operating the studio at the approved location.
Bft may refuse to issue and enter into a Franchise Agreement under certain conditions, including disapproval of the Developer's proposed affiliate, failure to demonstrate sufficient operational and financial capacity, non-compliance with existing agreements, failure to pay owed amounts, or failure to return the signed Franchise Agreement and associated documents within 15 days of receiving the execution copy from Bft. This protects Bft from potential issues with the Developer's ability to successfully operate the franchise.
Expiration or termination of the Multi-Unit Agreement does not necessarily impact the validity of already executed Franchise Agreements, unless the termination grounds also apply to the Franchise Agreements themselves, and Bft expressly terminates those agreements. This provides a level of security for both Bft and the franchisee, ensuring that existing studios can continue operating even if the broader development agreement ends.