Who is included in the definition of 'Restricted Party' regarding the non-solicitation covenants after the Bft agreement terminates?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
ve Relief.** Franchisee expressly agrees that 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 this Article 12. Franchisee acknowledges and agrees that any failure to comply with the requirements of this Article 12 will cause Franchisor irreparable injury for which no adequate remedy at law is available, and Franchisee accordingly agrees that Franchisor shall be entitled to injunctive relief as specified in Section 16.5 herein to enforce the terms of this Article 12. Franchisee shall pay all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by Franchisor in connection with the enforcement of this Article 12. The foregoing remedies shall be in addition to any other remedies Franchisor may have under this Agreement or applicable law.
13. COVENANTS NOT TO COMPETE
13.1 Non-Competition Covenants of Franchisee.
A. During the Term of this Agreement. Franchisee agrees that neither Franchisee, its principals, owners, or guarantors, nor any immediate family of Franchisee, its principals, owners, or guarantors ("Restricted Parties"), will, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation own, maintain, engage in, be employed or serve as an officer, director, or principal of, lend money or extend credit to, lease/sublease space to, or have any interest in or involvement with any fitness or exercise business (except a business that it operates
pursuant to a franchise agreement with Franchisor or its affiliates), any fitness or exercise marketing or consulting business, any business offering products of a similar nature to those of the Studio, or in any business or entity which franchises, licenses or otherwise grants to others the right to operate such aforementioned businesses (each a "Competing Business").
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the non-solicitation covenants apply not only to the franchisee but also to 'Restricted Parties' after the franchise agreement terminates. The document specifies that during the term of the agreement, the Restricted Parties include the franchisee, its principals, owners, or guarantors, and any immediate family of the franchisee, its principals, owners, or guarantors.
Specifically, after the termination of the Bft agreement, these 'Restricted Parties' are prohibited from soliciting business from customers of the franchisee's former studio or any other Bft studio. They are also restricted from contacting any of Bft's suppliers or vendors for any competitive business purpose for a period of two years.
This broad definition means that a franchisee's family members and business partners are also bound by these restrictions, even if they are not directly involved in the day-to-day operations of the Bft studio. This is a fairly standard practice in franchising to protect the brand and its network of franchisees from unfair competition. Prospective franchisees should carefully consider the implications of these restrictions on themselves and their families before entering into a franchise agreement with Bft.