For Bft franchise transfers, does a currently effective injunctive order relating to securities law against the transferring party prevent the transfer?

According to Bft's 2025 Franchise Disclosure Document, a currently effective injunctive or restrictive order or decree relating to securities law could impact a franchise transfer. Specifically, if the transferring party is subject to such an order resulting from a concluded or pending action brought by a public agency, this may prevent the transfer. This also applies to orders under federal, State, or Canadian franchise, antitrust, trade regulation or trade practice law.

This provision aims to ensure that individuals or entities involved in the Bft franchise system meet certain legal and ethical standards. The presence of an injunctive order suggests a history of non-compliance or legal issues that could pose a risk to the franchise system. Bft is likely trying to mitigate potential damage to its brand reputation and protect the interests of other franchisees by preventing transfers involving parties with such orders.

For a prospective Bft franchisee, this means that the franchisor will likely conduct thorough background checks on potential transferring parties to identify any existing injunctive orders. If such an order exists, it could delay or even prevent the transfer from proceeding. It is important for franchisees looking to transfer their franchise to be aware of this provision and to address any outstanding legal issues before attempting to transfer their franchise.