Can a Bft franchisee face competition from other franchisees?

According to the 2025 Bft Franchise Disclosure Document, Bft franchisees may face competition from several sources. Specifically, Bft franchisees should be aware that they will not receive an exclusive territory. This means that other franchisees, outlets owned by Bft, other distribution channels controlled by Bft, or even competitive brands that Bft controls could operate in the same area. This lack of an exclusive territory is a significant factor for potential franchisees to consider, as it directly impacts the competitive landscape they will be operating in.

Bft does designate a 'Designated Territory' around an authorized location, generally an area with at least 15,000 people. While Bft states that it will not operate or grant a license to a third party to operate a Bft studio within this Designated Territory as long as the franchisee is in compliance with the Franchise Agreement, this protection is subject to certain reservations of rights. Furthermore, this limited protection does not extend to other brands or marks that Bft may offer in the future. Bft retains the right to operate or license studios or distribution channels of any type, regardless of their location or proximity to a franchisee's Designated Territory, even if they provide similar services.

For multi-unit agreements, Bft provides a Development Area, and will not operate or grant a license to a third party to operate a studio within the Development Area as long as the franchisee complies with the Multi-Unit Agreement. However, Bft also reserves the right to engage in various activities, including acquiring or merging with other businesses that offer similar products or services under different marks, within or outside the Designated Territory or Development Area. Bft may also use the internet or alternative channels of commerce to sell products and services, potentially competing with franchisees, even within their Designated Territory. These reserved rights significantly limit the protection afforded by the Designated Territory and Development Area.

Prospective Bft franchisees should carefully consider these competitive factors and evaluate the potential impact on their business. Understanding the scope and limitations of the Designated Territory and the potential for competition from other franchisees, company-owned outlets, and alternative distribution channels is crucial for making an informed investment decision. It is important to note that Bft has affiliates that offer franchises using other trademarks, and there is no mechanism for resolving conflicts that may arise between franchised or company-owned studios operating under any of the Xponential Brands.