Does the Bft FDD specify the consequences of failing to meet the Development Schedule?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Developer fails to satisfy any requirement under the Development Schedule;
Notwithstanding anything contained in this Section, Franchisor will provide Developer with a onetime reasonable extension of time not to exceed 90 days to comply with its development obligations in any one of the Development Period as set forth in the Development Schedule (see Exhibit A), provided: (i) Developer has already executed a lease for, or otherwise obtained, a Site (defined in Section 2.D below) that Franchisor approves for any Studio(s) it is required to conduct its Soft Opening and operate during that Development Period; and (ii) Developer notifies Franchisor of its need for such an extension no less than 30 days prior to expiration of that Development Period. The Parties agree and acknowledge that Franchisor's grant of this one-time extension under this Section will not extend, modify or otherwise affect the expiration of any of Developer's subsequent Development Periods or subsequent development obligations.
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, failure to satisfy any requirement under the Development Schedule can result in termination of the franchise agreement by Bft. This means that if a developer fails to open the required number of studios within the specified Development Period, Bft has the right to terminate the agreement without providing an opportunity to cure the deficiency.
However, Bft may grant a one-time extension of up to 90 days to comply with development obligations in any one Development Period under certain conditions. To qualify for this extension, the developer must have already executed a lease or obtained a site approved by Bft for any studio they are required to open during that Development Period. Additionally, the developer must notify Bft of their need for an extension at least 30 days before the expiration of that Development Period.
It's important to note that receiving this one-time extension does not modify or extend any subsequent Development Periods or obligations. Therefore, franchisees must carefully consider the Development Schedule and ensure they can meet the required milestones to avoid potential termination of their franchise agreement. Prospective franchisees should discuss the Development Schedule and potential challenges with existing Bft franchisees to fully understand the implications.