How does the litigation history of Bft's affiliates, as described in Item 3, impact the franchisee's estimated initial investment, as detailed in Item 7?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following is added at the end of Item 3:
With regard to us, our parent, predecessor or affiliate, the persons identified in Item 2, or an affiliate offering franchises under our principal trademark:
- A. No such party has an administrative, criminal, or civil action pending against that person alleging: a felony, a violation of a franchise, antitrust, or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices or comparable civil or misdemeanor allegations.
- B. No such party has pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations.
- C. No such party has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the 10 year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise, antitrust, or securities law; fraud; embezzlement; fraudulent conversion; misappropriation of property; or unfair or deceptive practices; or comparable allegations.
- D. No such party is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a federal, State, or Canadian franchise, securities, antitrust, trade regulation or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Item 3 addresses the litigation history of Bft, its parent, predecessors, affiliates, and key personnel. Item 7 provides an estimate of the initial investment required to open a Bft franchise. However, Item 3, as amended, states that no listed party has pending or past administrative, criminal, or civil actions alleging felonies, violations of franchise, antitrust, or securities laws, fraud, embezzlement, or unfair practices that would be considered significant. Nor are they subject to current injunctive or restrictive orders relating to franchise or other business laws. Therefore, based on the information provided, the litigation history of Bft's affiliates, as described in Item 3, does not directly impact the franchisee's estimated initial investment as detailed in Item 7. The absence of significant adverse litigation suggests that there are no known legal risks that would specifically increase the initial investment. However, it is important to note that this statement is based on the information available as of the FDD's issuance date, and the legal landscape can change. Prospective franchisees should conduct their own due diligence and consult with legal counsel to assess any potential risks.
The initial investment for a Bft franchise ranges from $509,836 to $1,204,045. This includes expenses such as the initial franchise fee, sourcing fee, travel and living expenses while training, real estate/lease costs, leasehold improvements, signage, insurance, fitness equipment, the Pre-Sales and Soft Opening Retail Inventory Kit, audio/visual package, initial marketing and advertising spend, initial instructor training fee, technology and software fees, and additional funds for the first three months of operation. The initial franchise fee is $60,000, but it may be reduced to $50,000 or $40,000 for existing franchisees opening additional locations. A sourcing fee of up to $28,000 may also apply if a franchise broker is owed a commission.
While the FDD states that the litigation history does not currently impact the initial investment, potential franchisees should still consider the broader implications of any past or pending litigation. Litigation can be costly and time-consuming, and it can potentially affect the franchisor's ability to support its franchisees. Therefore, it is prudent for prospective franchisees to carefully review Item 3 and any related disclosures to assess the overall legal health of the Bft franchise system. Additionally, franchisees should seek professional advice to evaluate the potential impact of any litigation on their investment and business operations.