After the Bft franchise agreement terminates, for how long is the franchisee prohibited from engaging in franchising activities related to a competing business?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. After the Term of this Agreement. Franchisee agrees that, unless (and then only to the extent) prohibited by Applicable Law, Franchisee, the Restricted Parties, and its owners will comply with the following:
- (1) Prohibition on Franchising Activities. For two (2) years after the expiration or termination (by Franchisor or by Franchisee for any reason) of this Agreement or after Franchisee has assigned its interest in this Agreement, neither Franchisee nor any other Restricted Party will, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, be involved with any business that competes in whole or in part with Franchisor by offering or granting licenses or franchises, or establishing joint ventures, for the ownership or operation of a Competing Business. The geographic scope of the covenant contained in this Section is any location where Franchisor can demonstrate it has offered or sold franchises as of the date this Agreement is terminated or expires.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, a franchisee is restricted from involvement in franchising activities that compete with Bft for a period of two years following the termination or expiration of the franchise agreement. This restriction applies regardless of whether the termination is initiated by Bft or the franchisee, or if the franchisee has assigned their interest in the agreement. This non-compete clause extends to the franchisee, their owners, and any other restricted parties.
The restriction specifically prohibits the franchisee from directly or indirectly engaging with any business that offers or grants licenses or franchises, or establishes joint ventures, for the ownership or operation of a competing business. The geographic scope of this covenant covers any location where Bft can demonstrate it has offered or sold franchises as of the date the agreement is terminated or expires.
This means that a former Bft franchisee is barred from starting their own competing franchise system or joining an existing one for two years. This is a fairly standard practice in franchising to protect the brand and business model. Prospective franchisees should carefully consider this restriction, especially if they envision potentially wanting to operate a similar business in the future.