Does the Bft Development Agreement include a non-disparagement clause for Bft developers?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
F. Non-Disparagement. Developer agrees that it will not (and will use its best efforts to cause its current and former owners, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, affiliates, successors and assigns not to) (i) make any untrue or derogatory statements concerning Franchisor and its affiliates, as well as their present and former officers, employees, shareholders, directors, agents, attorneys, servants, representatives, successors and assigns; or (ii) undertake any act which would (a) subject the Marks to ridicule, scandal, reproach, scorn, or indignity, (b) negatively impact the goodwill of Franchisor or its affiliates, the Marks, other components of the System, or any other brands owned or controlled by Franchisor or its affiliates, or (c) constitute an act of moral turpitude (including, without limitation, verbal, physical, or sexual harassment towards any other person).
Notwithstanding the foregoing, nothing in this Agreement or any other agreement with Franchisor restricts or prohibits any person from initiating communications directly with, responding to any inquiries from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or from filing a claim or assisting with an investigation directly with a self-regulatory authority or a government agency or entity, including the U.S. Securities and Exchange Commission, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. No person needs the prior authorization of Franchisor to engage in conduct protected by the preceding sentence, and no person needs to notify Franchisor that such person has engaged in such conduct.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
Yes, according to Bft's 2025 Franchise Disclosure Document, the Development Agreement includes a non-disparagement clause. The agreement states that the developer agrees not to make any untrue or derogatory statements concerning Bft and its affiliates, including their officers, employees, shareholders, directors, agents, attorneys, and representatives. This extends to preventing current and former owners, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, affiliates, successors, and assigns from making such statements.
Furthermore, the developer must not undertake any action that would subject Bft's Marks to ridicule, scandal, reproach, scorn, or indignity. They must also avoid actions that negatively impact the goodwill of Bft or its affiliates, the Marks, other components of the System, or any other brands owned or controlled by Bft or its affiliates. The clause also prohibits any act of moral turpitude, including verbal, physical, or sexual harassment towards any other person.
However, the agreement clarifies that it does not restrict or prohibit any person from communicating directly with, responding to inquiries from, providing testimony before, providing confidential information to, or reporting possible violations of law or regulation to self-regulatory authorities or government agencies, including the U.S. Securities and Exchange Commission. It also protects disclosures under whistleblower provisions of state or federal law or regulation, and no prior authorization or notification to Bft is required for such conduct. This ensures that the non-disparagement clause does not impede legally protected disclosures or reporting of violations.