If Bft chooses to purchase the assets of the Studio upon termination, does that include equipment?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
BFT FRANCHISE SPV, LLC MULTI-UNIT AGREEMENT*
This Multi-Unit Agreement (this "Agreement") is made effective as of the Effective Date by and between BFT FRANCHISE SPV, LLC, a Delaware limited liability company with its principal business address at 17877 Von Karman Ave., Suite 100 Irvine, CA 92614 ("Franchisor"), and the person or entity identified as the "Developer" in the signature blocks below ("Developer," and together with Franchisor, the "Parties"). The Effective Date is the date Franchisor signs this Agreement as shown beneath its signature hereto.
RECITALS:
WHEREAS, Franchisor owns, administers and grants franchises for a system of fitness studios (the "Studios") that are currently identified by and use the trademark "BFT" and other related trademarks and service marks designated from time to time by Franchisor (the "Marks"), that reflect distinctive interior design and display procedures, and color scheme and décor (the "Trade Dress"), and that use certain of Franchisor's certain intellectual property including trade secrets, copyrights, confidential and proprietary information, and designated training and exercise methods and know-how, fitness equipment, furniture and fixtures, marketing, advertising and sales promotions, cost controls, accounting and reporting procedures, and personnel management systems (together with the Marks and Trade Dress, the "System").
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to the 2025 FDD, Bft's System incorporates designated training and exercise methods and know-how, fitness equipment, furniture and fixtures. In the event of termination, Bft has the option to purchase certain assets of the studio at fair market value, which could include fitness equipment, furniture, and fixtures.
However, the FDD stipulates that this purchase is subject to applicable laws and may include goodwill in certain instances, offset by any amounts the franchisee owes to Bft. This means the actual amount received by the franchisee could be reduced by outstanding debts.
Prospective franchisees should seek clarification from Bft regarding the specific assets included in the purchase option, the valuation methods used to determine fair market value, and the conditions under which goodwill is considered. Understanding these details is crucial for assessing the potential financial implications of termination.