Can Bft license a third party to establish and operate Bft Studios outside of a franchisee's Designated Territory?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our parents/affiliates reserve the exclusive right to conduct the following activities under the Franchise Agreement and/or Multi-Unit Agreement (as appropriate): (i) establish and operate, and license any third party the right to establish and operate, other Studios and Studios using the Marks and System at any location outside of your Designated Territory(ies) and, if applicable, Development Area; (ii) market, offer and sell products and services that are similar to the products and services offered by the Studio under a different trademark or trademarks at any location, within or outside the Designated Territory(ies) and, if applicable, the Development Area; (iii) use the Marks and System, as well as other such marks we designate, to distribute any Approved Products and/or Approved Services in any alternative channel of distribution, within or outside the Designated Territory(ies) and Development Area (including the Internet and other e-commerce channels and streaming platforms; wholesale
stores, retail stores, catalog sales, etc.) as further described below; (iv) to acquire, merge with, or otherwise affiliate with, and after that own and operate, and franchise or license others to own and operate, any business of any kind, including, without limitation, any business that offers products or services the same as or similar to the Approved Products and Approved Services (but under different marks), within or outside your Designated Territory(ies) and, if applicable, Development Area; (v) use the Marks and System, and license others to use the Marks and System, to engage in any other activities not expressly prohibited in your Franchise Agreement and, if applicable, your Multi-Unit Agreement; and (vi) open and operate, or license third parties the right to open or operate, Studios at "Non-Traditional Sites" both within and outside the Designated Territory and, if applicable, Development Area. "Non-Traditional Site" means any location that is situated within or as part of a larger venue or facility and, as a result, is likely to draw the predominance of its customers from those persons who are using or attending events in the larger venue or facility (for example, "big box" gyms and/or fitness facilities, cruise ships, military bases, shopping malls, airports, sports facilities and stadiums, industrial or office complexes, hotels, train stations and other transportation facilities, travel plazas, casinos, hospitals, theme parks, convention centers, colleges/universities, multi-unit residential properties, and other similar captive market locations).
Source: Item 12 — TERRITORY (FDD pages 50–54)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft retains the right to license third parties to establish and operate Bft studios outside of a franchisee's designated territory. This is explicitly stated as one of Bft's reserved rights under both the Franchise Agreement and the Multi-Unit Agreement. This means that while franchisees are granted certain protected rights within their designated territory, Bft maintains control over expansion and market penetration in areas outside those territories.
This reserved right allows Bft to grow its brand presence strategically without being limited by individual franchise territories. Bft can establish studios in new markets, explore alternative channels of distribution, and pursue partnerships without needing the consent of existing franchisees. This flexibility is crucial for Bft to adapt to changing market conditions and capitalize on emerging opportunities.
For a prospective Bft franchisee, this means that while they have some territorial protection, Bft can still expand and license new locations outside of their territory. This could potentially impact the franchisee's long-term growth prospects, as Bft can license third parties to operate studios outside of the franchisee's Designated Territory. It is important for potential franchisees to understand the implications of these reserved rights and how they might affect their business.
Furthermore, Bft can also open studios at "Non-Traditional Sites" both within and outside the Designated Territory. These sites include locations within larger venues such as gyms, cruise ships, military bases, shopping malls, airports, and other similar locations. This strategy allows Bft to capture customers in captive market locations, further expanding its reach beyond traditional studio locations.