Who is included in the definition of 'Restricted Party' regarding post-term restrictions for a Bft franchise?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. After the Term of this Agreement. Franchisee agrees that, unless (and then only to the extent) prohibited by Applicable Law, Franchisee, the Restricted Parties, and its owners will comply with the following:
- (1) Prohibition on Franchising Activities. For two (2) years after the expiration or termination (by Franchisor or by Franchisee for any reason) of this Agreement or after Franchisee has assigned its interest in this Agreement, neither Franchisee nor any other Restricted Party will, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, be involved with any business that competes in whole or in part with Franchisor by offering or granting licenses or franchises, or establishing joint ventures, for the ownership or operation of a Competing Business. The geographic scope of the covenant contained in this Section is any location where Franchisor can demonstrate it has offered or sold franchises as of the date this Agreement is terminated or expires.
- (2) Prohibition on Competing Businesses. For two (2) years after the expiration or termination (by Franchisor or by Franchisee for any reason) of this Agreement or after Franchisee has assigned its interest in this Agreement, neither Franchisee nor any other Restricted Party will own, maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend credit to, lease/sublease space to, or have any interest in or involvement with, any other Competing Business: (i) at the Authorized Location; or (ii) within a ten (10)-mile radius of (a) the Authorized Location, or (b) any other BFT Studio owned by Franchisor, its affiliates, or any franchisee, which is open, under lease or otherwise under development as of the date this Agreement expires or is terminated.
- (3) Transfer of All Ownership Interests. If an owner of Franchisee ceases to be an owner of Franchisee for any reason, the former owner shall comply with the provision of this Section 13.1.B as though this Agreement were terminated as of the date on which the owner ceased to be an owner.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
Based on the 2025 Bft Franchise Disclosure Document, the term 'Restricted Parties' is used in the context of post-term restrictive covenants, but the document excerpts provided do not explicitly define who constitutes a 'Restricted Party.' However, the FDD does state that 'Franchisee, the Restricted Parties, and its owners' are subject to certain restrictions after the termination or expiration of the franchise agreement. These restrictions include prohibitions on franchising activities and engaging in competing businesses.
Specifically, for two years after the agreement ends, neither the franchisee nor any other 'Restricted Party' can be involved in businesses that compete with Bft by offering franchises or establishing joint ventures in any location where Bft has offered or sold franchises. Additionally, they are restricted from owning, maintaining, or being involved with any competing business at the authorized location or within a ten-mile radius of the authorized location or any other Bft studio owned by the franchisor, its affiliates, or any franchisee.
Furthermore, if an owner of the Bft franchise ceases to be an owner for any reason, that former owner must also comply with these restrictions as if the agreement were terminated on the date they ceased to be an owner.
To fully understand the scope and implications of these post-term restrictions, a prospective franchisee should seek clarification from Bft regarding the precise definition of 'Restricted Party.' This will help them assess the potential impact on their future business activities and those of related individuals or entities.