What happens if a Bft developer does not sign a lease for the applicable premises?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
E. Execution of Franchise Agreements. Simultaneously with the execution of this Agreement, Developer (or its approved affiliate) must sign and deliver to Franchisor a Franchise Agreement and related documents representing the first Franchise that Developer is obligated to acquire under this Agreement. Developer (or its approved affiliate) must thereafter conduct its Soft Opening and operate a Studio according to the terms of that Franchise Agreement. Thereafter, once Franchisor has accepted a Site, and prior to signing a lease or otherwise securing possession of the Site, Developer (or its approved affiliate) must sign Franchisor's then-current form of Franchise Agreement (including, without limitation,
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, after Bft accepts a proposed site, the developer (or their approved affiliate) must sign Bft's current Franchise Agreement before signing a lease or securing possession of the site. The FDD does not explicitly state the consequences if the developer fails to sign the lease after the Franchise Agreement is signed.
However, it is implied that failing to sign the lease after the Franchise Agreement could result in a breach of the Multi-Unit Agreement. Bft requires the developer to comply with the Development Schedule, which necessitates securing sites for studios. Failure to secure a site by not signing a lease could impede the developer's ability to meet the schedule.
Prospective Bft developers should clarify with Bft the specific repercussions of not signing a lease after a Franchise Agreement has been signed for a site. This includes understanding potential penalties, termination clauses, or other liabilities that may arise from such a situation. Understanding these details is crucial for managing development obligations and avoiding potential disputes with Bft.