What is the impact of the bankruptcy filings mentioned in Item 4 on the franchisee's ability to secure pre-opening assistance for a Bft franchise, as detailed in Item 11?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following is added to the end of Item 4:
Neither we, our affiliate, predecessor, officers, or general partners or any other individual who will have management responsibility relating to the sale or operation of franchises offered by this Disclosure Document have, during the 10-year period immediately preceding the date of the Disclosure Document: (a) filed as debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code; (b) obtained a discharge of its debts under the U.S. Bankruptcy Code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a discharge of its debts under the U.S. Bankruptcy Code during or within 1 year after that officer or general partner of the franchisor held this position in the company or partnership.
- The following is added to the end of Item 5:
We apply the initial franchise fee to defray our costs for site review and approval, sales, legal compliance, salary, and general administrative expenses and profits.
- The following is added to the end of the "Summary" sections of Item 17.c, entitled Requirements for renewal or extension, and Item 17.m, entitled Conditions for franchisor approval of transfer:
However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied.
- The "Summary" section of Item 17.d, entitled Termination by franchisee is amended to add the following:
You may terminate the Franchise Agreement or the Multi-Unit Agreement on any grounds available by law.
- The "Summary" section of Item 17.j, entitled Assignment of contract by franchisor is amended to add the following:
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Item 11 outlines the pre-opening assistance that Bft provides to its franchisees. This includes providing the Owner/Operator Training Module and Designated Manager Training Module, access to the Learning Management System, and Pre-Opening Instructor Training. The timing of the Initial Training Program is typically within thirty days prior to the studio opening, subject to the availability of Bft's training personnel. The training is provided at Bft's corporate headquarters or another designated training facility, potentially virtually. Item 11 does not mention any impact of bankruptcy filings on the pre-opening assistance provided by Bft.
Item 4 of the FDD addresses whether the franchisor, its affiliates, predecessors, officers, or general partners have been involved in bankruptcy proceedings within the last 10 years. Item 17 adds a statement confirming that none of these parties have filed for bankruptcy, obtained a discharge of debts under the U.S. Bankruptcy Code, or been a principal officer of a company or a general partner in a partnership that underwent bankruptcy during or within one year of their tenure. This statement aims to assure prospective franchisees that the company has a stable financial history and that its leadership has not been associated with bankruptcy.
While the FDD provides information on pre-opening assistance and bankruptcy history, it does not explicitly link the two. The absence of bankruptcy filings among key personnel, as stated in Item 17, could be interpreted positively, suggesting a lower risk of disruptions to the pre-opening assistance program. However, the FDD does not guarantee that pre-opening assistance will remain unaffected in all circumstances. A prospective franchisee should directly inquire with Bft about any potential risks or impacts that the company's financial health or any past financial difficulties of its related parties could have on the delivery of pre-opening support and training.