Does the Bft franchise agreement specify that a franchisee must comply with non-interference covenants after termination or non-renewal?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
on/non-renewal**:
The requirement to pay damages will not be enforced to the extent prohibited by applicable law.
- The following is added to the end of the "Summary" section of Item 17.r, entitled Noncompetition covenants after the franchise is terminated or expires:
Covenants not to compete such as those mentioned above are generally considered unenforceable in the State of North Dakota; however, we and you will enforce the covenants to the maximum extent the law allows.
6.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
The 2025 Bft Franchise Disclosure Document addresses covenants not to compete within its franchise agreement. Specifically, for franchisees operating in North Dakota, the FDD states that covenants not to compete are generally considered unenforceable. However, Bft will enforce these covenants to the maximum extent the law allows. This suggests that while Bft includes non-compete provisions, their enforceability is subject to state laws.
Additionally, the FDD includes information regarding Washington state law, stating that a franchisor cannot restrict, restrain, or prohibit a franchisee from soliciting or hiring any employee of a franchisee of the same franchisor or any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
For a prospective Bft franchisee, this means the enforceability of non-compete clauses can vary significantly depending on the state where they operate their franchise. It is important to seek legal counsel to understand the specific non-compete obligations and their enforceability in their state. It also means that Bft franchisees in Washington have more freedom to hire employees from other Bft locations or from Bft itself.