When listing owners for a Bft franchise, what details about their interest in the Developer are required?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
If Developer is not a natural person (a "Business Entity"), Developer agrees, represents and warrants to Franchisor that: (1) it was validly formed and will maintain, throughout the Term (defined in Section 2.A below), its existence and good standing under the laws of the state of its formation and qualified to do business in the jurisdictions covered by the Development Area; (2) Exhibit A to this Agreement describes all of Developer's owners and their interests in Developer as of the Effective Date; (3) each of Developer's owners that has at least 10% direct or indirect ownership interest in Developer, and their spouse, will sign and deliver to Franchisor its then-standard form of Guarantee, Indemnification, and Acknowledgment (the "Guaranty"), the current form of which is attached as Exhibit B hereto; (4) the only business Developer will own or operate during the Term will be the exercise of the rights granted to it under this Agreement and any other agreement between it and Franchisor or its successors and assigns; and (5) at
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 the Developer is not a natural person, Exhibit A to the Multi-Unit Agreement must describe all of the Developer's owners and their interests in the Developer as of the effective date of the agreement. Additionally, each owner with at least 10% direct or indirect ownership interest, along with their spouse, must sign and deliver a Guaranty, Indemnification, and Acknowledgment to Bft. The current form of this guaranty is attached as Exhibit B to the Multi-Unit Agreement.
This requirement ensures that Bft knows who the principals are behind the Developer entity and that those with significant financial stakes are personally committed to upholding the agreement. The 10% threshold is a common benchmark in franchising to identify key stakeholders whose involvement is critical to the success and stability of the franchise operation. By requiring a personal guaranty from these individuals and their spouses, Bft aims to mitigate its risk and ensure accountability.
Prospective Bft franchisees should carefully review Exhibit A to understand the specific format and information required for disclosing ownership interests. They should also be prepared to have all owners with at least a 10% stake, and their spouses, execute the Guaranty, Indemnification, and Acknowledgment. Failure to properly disclose ownership information or provide the required guarantees could potentially delay or jeopardize the franchise approval process.