Does the Bft Development Agreement specify that there is no recourse against nonparty affiliates of the franchisor?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- E. No Recourse Against Nonparty Affiliates. Developer agrees that it will look only to Franchisor to perform under this Agreement. Franchisor's affiliates are not parties to this Agreement and have no obligations under it. Developer may not look to Franchisor's affiliates for performance. Developer agrees that Franchisor's and its affiliates' members, managers, owners, directors, officers, employees and agents shall not be personally liable or named as a party in any action between Franchisor or its affiliates and Developer or its affiliates or their respective owners**.**
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 Agreement explicitly states that developers have no recourse against nonparty affiliates of Bft. The agreement specifies that developers must look solely to Bft for performance under the agreement. This means Bft's affiliates are not obligated to perform any duties outlined in the agreement.
This provision protects Bft's affiliates from being named as parties in any legal actions between Bft and the developer. It also shields the members, managers, owners, directors, officers, employees, and agents of Bft and its affiliates from personal liability in such disputes. This clause is designed to limit the liability of related entities and individuals associated with Bft.
For a prospective Bft developer, this means that any legal recourse for issues arising from the Development Agreement is limited to Bft itself. Developers cannot pursue legal action against Bft's parent company, subsidiaries, or individual employees. This is a significant consideration, as the financial stability and resources of Bft will be the sole basis for any potential recovery in case of a dispute. Franchisees should carefully evaluate Bft's financial condition and ability to meet its obligations under the agreement.