Does having a claim against the franchisor excuse a Bft franchisee from complying with the non-compete covenants in Article 13?

According to Bft's 2025 Franchise Disclosure Document, a franchisee's claims against Bft do not excuse compliance with the non-compete covenants outlined in Article 13 of the franchise agreement. Specifically, the agreement states that the existence of any claims a franchisee may have against Bft, regardless of whether they arise from the agreement itself, will not serve as a defense against the enforcement of these covenants. This means that even if a franchisee believes Bft has acted wrongly, they are still obligated to adhere to the non-compete terms.

This provision is significant for prospective franchisees because it underscores the importance of understanding and being prepared to adhere to the non-compete obligations. These obligations typically restrict a franchisee's ability to engage in similar businesses or solicit customers and employees within a specified area and timeframe after the franchise agreement ends. The franchisee acknowledges that violating the non-compete will cause irreparable injury to Bft and that Bft is entitled to injunctive relief, damages, and an accounting of profits resulting from the violation.

Bft emphasizes the reasonableness and necessity of these restrictions to protect its legitimate business interests and the overall franchise system. The agreement also stipulates that Bft is entitled to preliminary and permanent injunctive relief, damages, and an equitable accounting of earnings if a franchisee violates the non-compete terms. Furthermore, the franchisee waives any bond requirement related to preliminary relief. The franchisee is responsible for all costs and expenses, including reasonable attorney's fees, incurred by Bft in enforcing Article 13. If a court finds any part of Article 13 unenforceable, it can modify the terms to make them reasonable and enforceable.

Moreover, if a franchisee challenges the enforcement of Article 13, and the enforcement is delayed due to litigation, the non-competition period will be extended by the length of the delay if Bft prevails in court. Bft also retains the right to reduce the scope of any non-compete covenant without the franchisee's consent, effective immediately upon written notice. This clause highlights the considerable power Bft holds in enforcing and even modifying the non-compete agreements, further emphasizing the importance for franchisees to fully understand these obligations.