Are Bft franchisees required to deposit presale membership amounts into escrow before the facility opens?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Certain states and local governments have passed laws relating specifically to health and fitness facilities, including laws requiring bonds if a health and fitness facility sells memberships valid for more than a specified time period, requiring facility owners to deposit into escrow certain amounts collected from members before the facility opens (so-called "presale" memberships) and imposing other restrictions on memberships that health and fitness facilities sell.
Source: Item 1 — THE FRANCHISOR, ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–12)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, certain states or local laws may require Bft facility owners to deposit amounts collected from members before the facility opens into escrow. These are referred to as "presale" memberships.
In practical terms, this means that if a Bft franchisee operates in a location with such a law, they will need to establish an escrow account and deposit the funds from memberships sold before the studio opens into that account. This requirement is designed to protect consumers by ensuring that the funds are available to refund members if the facility does not open as planned.
It is important for prospective Bft franchisees to investigate the specific laws and regulations in their local area to determine whether this requirement applies. Failure to comply with these laws could result in legal penalties or other enforcement actions. Franchisees should consult with legal counsel to ensure they understand and comply with all applicable regulations.