Does the Bft franchisor apply the initial franchise fee towards profits?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
develops and commences operation of a replacement Studio in compliance with an applicable Franchise Agreement. If, during the Term, Developer transfers a Studio in accordance with the transferred Studio's Franchise Agreement, the transferred Studio shall continue to be counted in determining Developer's compliance with the Development Schedule so long as it continues to be operated as a Studio. If, at any time, the transferred Studio ceases to be operated as a Studio, it will not count toward satisfaction of the Development Schedule.
4. DEVELOPMENT FEE
Concurrently with the execution of this Agreement, Developer must pay to Fra
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the franchisor will credit the Development Fee towards the Initial Franchise Fee under specific conditions. Specifically, for those signing a Multi-Unit Agreement, the Development Fee is credited in $10,000 increments toward the Initial Franchise Fee due under the second and each subsequent Franchise Agreement signed pursuant to the Multi-Unit Agreement. This continues until the total credits equal the Development Fee.
This arrangement benefits the franchisee by reducing the upfront costs associated with opening multiple Bft locations under a Multi-Unit Agreement. Instead of paying the full Initial Franchise Fee for each location, the franchisee can utilize the Development Fee credit to offset these costs. This can significantly lower the financial burden of expanding the franchise network.
However, it's important to note that the Development Fee is non-refundable and is deemed fully earned by Bft upon the execution of the Multi-Unit Agreement. This means that if the franchisee does not open the planned number of studios, they will not receive a refund for the remaining Development Fee. This arrangement incentivizes the franchisee to proceed with the development schedule outlined in the Multi-Unit Agreement. The credit is only applicable to the Initial Franchise Fee and not to any other fees or expenses associated with opening a Bft franchise.