Is a Bft franchisee required to assign their lease to the franchisor upon termination?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee shall be in material default in the performance of any of its obligations or materially breach any term or condition of this Agreement, in addition to Franchisor's right to terminate this Agreement, and without limiting any other rights or remedies to which Franchisor may be entitled at law or in equity, Franchisor may, at its election, immediately or at any time thereafter, and without notice to Franchisee cure such default for the account of and on behalf of Franchisee including entering upon and taking possession of the Studio for a period not to exceed one hundred
and eighty (180) consecutive days and taking, in the name of Franchisee, all other actions necessary to effect the provisions of this Agreement and any such entry or other action shall not be deemed a trespass or other illegal act, and Franchisor shall not be liable (except with respect to Franchisor's gross negligence or intentional misconduct) in any manner to Franchisee for so doing, and Franchisee shall pay the entire cost thereof to Franchisor on demand, including reasonable compensation to Franchisor for the management of the Studio.
- Franchisor's Right to Purchase the Studio. Section 15.3(I) of the Franchise Agreement is amended and supplemented to include the following:
To the extent, this Section 15.3(I) is inconsistent with RCW 19.100.180(2)(i), it is hereby deemed modified to comply with RCW 19.100.180(2)(i). Subject to applicable laws, Franchisor is required to purchase certain assets at fair market value (including goodwill in certain instances) at the time of expiration or termination of the franchise, offset by any amounts owed by the Franchisee to the Franchisor.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
The 2025 Bft Franchise Disclosure Document does not explicitly state that a franchisee is required to assign their lease to the franchisor upon termination. However, it does state that if a franchisee is in material default or breaches the agreement, Bft has the right to cure the default, take possession of the studio for up to 180 days, and take actions necessary to enforce the agreement.
Additionally, the FDD mentions that Bft is required to purchase certain assets at fair market value (including goodwill in certain instances) at the time of expiration or termination of the franchise, offset by any amounts owed by the Franchisee to the Franchisor. This suggests that the lease assignment may be subject to applicable laws and specific terms outlined in the franchise agreement, which are not detailed in the provided excerpts.
To fully understand the obligations regarding lease assignments upon termination or expiration, a prospective Bft franchisee should carefully review the entire Franchise Agreement, specifically Section 15.3(I), and consult with a legal professional. It would be prudent to directly ask Bft about their policies and procedures regarding lease assignments, and under what specific conditions a lease assignment would be required.