Can the Bft franchisor operate a Bft studio near the franchisee's studio without compensating the franchisee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.4 Rights Reserved to Franchisor. For the avoidance of doubt, Franchisor reserves for itself and its affiliates all rights not expressly granted to Franchisee in this Agreement and the right to do all things that Franchisor does not expressly agree in this Agreement not to do, in each case, without regard to proximity to the Studio and without any compensation to Franchisee, and on such terms and conditions as Franchisor deems appropriate. Without limitation, Franchisor and its affiliates may, themselves or through authorized third-parties (and Franchisee is not granted the right to): (a) open and operate, and license third-parties the right to open or operate, other BFT Studios utilizing the Marks and System outside the Designated Territory;
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft reserves specific rights for itself and its affiliates without providing compensation to the franchisee. Specifically, Bft retains the right to operate or license others to operate Bft studios outside the franchisee's designated territory. This can occur without regard to the proximity to the franchisee's studio and without any compensation to the franchisee.
This means that while a Bft franchisee is granted an exclusive territory where Bft will not operate or license another franchise, Bft can still operate or license studios outside of that territory. The franchisee will not be compensated if Bft chooses to operate or license a studio near the franchisee's location, as long as it is outside the designated territory.
This clause highlights the importance of carefully evaluating the designated territory before signing a franchise agreement. A prospective Bft franchisee should consider the potential for Bft to establish other locations nearby, which could impact their business. It is also important to understand the criteria Bft uses to define and modify territories, especially regarding population density, as the franchisor can modify the boundaries of the Designated Territory if the population of the Designated Territory is over 50,000.