What could happen if a Bft franchisee fails to comply with the purchasing restrictions?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
tion with the operation of the Studio products or services that have not been approved by Franchisor;
- (11) Franchisee fails to abide by the pertinent marketing and advertising requirements and procedures and participates in marketing programs for the Studio as established by Franchisor;
- (12) Franchisee fails to (i) comply with the Performance Standards as set forth in Section 8.7 of this Agreement and fails to participate in and implement all temporary and permanent corrective measures mandated by Franchisor to address such non-compliance, (ii) comply with System Standards for cleanliness, customer service, equipment maintenance, and any other System Standards which effect or enhance the member experience at the Studio, or (iii) achieve the Minimum Monthly Gross Sales Quota described in Section 8.7 during any trailing 36-month period, regardless of its participation in any corrective training programs mandated by Franchisor; or
- (13) Franchisee fails to (a) utilize Franchisor's then-current approved supplier to provide the Opening Support Program, (b) actively engage in the Pre-Sales Phase activities set forth in the plan that Franchisor and/or its approved supplier approves in connection with the Opening Support Program, and/or (c) fails to timely acquire the Pre-Sales and Soft Opening Retail Inventory Kit or expend the required minimum amounts that Franchisor prescribes in connection with the Pre-Sales Phase and other pre-opening activities designed to promote the Studio consistent with the terms of this Agreement.
- 15.2 Cross-Default. If there are now, or hereafter shall be, other franchise agreements or any other agreements in effect between Franchisee or any of its affiliates and Franchisor or any of its affiliates, a default by Franchisee or any of its affiliates and/or owners under the terms and conditions of this Agreement or any other such agreement, shall at the option of Franchisor, constitute a default under this Agreement and all such other agreements.
- 15.3 Obligations of Franchisee upon Termination or Expiration. Immediately upon termination or expiration of this Agreement for any reason:
- A.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, a franchisee's failure to adhere to purchasing requirements can lead to specific consequences. If a Bft franchisee fails to utilize Bft's approved supplier for the Opening Support Program, neglects to actively participate in pre-sales activities as outlined in the approved plan, or fails to acquire the Pre-Sales and Soft Opening Retail Inventory Kit or spend the minimum required amounts for pre-opening activities, it constitutes a breach of the agreement.
Furthermore, the FDD specifies that if there are multiple franchise agreements between the franchisee and Bft, a default under one agreement can be considered a default under all agreements, at Bft's discretion. This cross-default provision means that a failure to comply with purchasing requirements could trigger a default not only for the specific franchise agreement related to those requirements but also for any other agreements in place.
In cases of default, Bft may issue a written notice, and the franchisee typically has 30 days to remedy the default to Bft's satisfaction. However, for certain defaults, such as those described in specific subsections of the agreement, the cure period may be shorter, such as 10 days. If the franchisee fails to cure the default within the given timeframe, Bft has the right to immediately terminate the franchise agreement, in addition to any other legal or equitable remedies available to them.
Moreover, repeated failures to comply with any provision of the agreement, including purchasing requirements, can also lead to termination. If a franchisee fails to comply with any provision of the agreement on three or more separate occasions within a 12-month period, Bft can terminate the agreement, regardless of whether Bft notified the franchisee of the failures or whether the franchisee corrected the failures after notification.