If a Bft Developer violates post-term or post-transfer restrictions, how long do the restrictions remain in effect?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Enforcement of Covenants. Developer agrees that: (a) the restrictions contained and described in this Article 6 are reasonable and necessary to protect the legitimate interests of the System and Franchisor, (b) the existence of any claims it may have against Franchisor, whether or not arising out of this Agreement, shall not constitute a defense to the enforcement of the covenants in this Article 6, and (c) Developer's or any Restricted Party's violation of the terms of this Article 6 will cause irreparable injury to Franchisor for which no adequate remedy at law is available and that Franchisor shall be entitled, without bond (which requirement is hereby waived), to preliminary and permanent injunctive relief and damages, as well as an equitable accounting of all earnings, profits, and other benefits arising from such violation, which remedies shall be cumulative and in addition to any other rights or remedies to which Franchisor shall be entitled. Developer shall pay all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by Franchisor in connection with the enforcement of this Article 6. If Developer or a Restricted Party violates any post-term or post-transfer restriction described in this Article 6, the restrictions contained herein shall remain in effect until two (2) years after Developer or such Restricted Party begins to comply with those restrictions. If Developer contests the enforcement of this Article 6 and enforcement is delayed pending litigation, and if Franchisor prevails, the period of non-competition shall be extended for an additional period equal to the period of time that enforcement of this Article 6 is delayed. Courts are authorized and directed to reduce the scope or duration (or both) of the provision(s) in issue solely to the extent necessary to render it enforceable and/or reasonable and to enforce the provision so revised. Franchisor may, in its discretion and upon written notice, reduce the scope of any covenant not to compete, or any portion thereof, without Developer's consent.
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, if a Developer or a Restricted Party violates any post-term or post-transfer restriction described in Article 6, the restrictions will remain in effect for two years after the Developer or Restricted Party begins to comply with those restrictions. This means that the clock on the non-compete period doesn't start ticking until the violating party ceases the prohibited activity.
Furthermore, if Bft faces delays in enforcing Article 6 due to legal challenges from the Developer, and Bft prevails in court, the non-competition period will be extended by a period equal to the length of the enforcement delay. This provision protects Bft's interests by ensuring that the non-compete obligations are fully enforced, even if litigation occurs.
The FDD also states that the Developer acknowledges the restrictions outlined in Article 6 are reasonable and necessary to protect Bft's legitimate business interests. The Developer also agrees that any claims they may have against Bft will not be a valid defense against the enforcement of these covenants. Bft is entitled to preliminary and permanent injunctive relief, damages, and an equitable accounting of all earnings, profits, and other benefits arising from a violation of Article 6. These remedies are cumulative and in addition to any other rights or remedies Bft may have.
Bft also has the right to reduce the scope of any covenant not to compete, or any portion thereof, without the Developer's consent, by providing written notice. Additionally, the Developer is responsible for covering all costs and expenses, including reasonable attorney's fees, incurred by Bft in enforcing Article 6.