For how long after the termination of a Bft franchise agreement are franchisees restricted from operating a competing business?
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)
According to Bft's 2025 Franchise Disclosure Document, franchisees face restrictions on operating a competing business for a period of two years after the termination or expiration of their franchise agreement. This restriction applies regardless of whether the termination is initiated by Bft or the franchisee, or if the franchisee has assigned their interest in the agreement.
The restrictions include prohibitions on involvement with any business that competes with Bft by offering or granting licenses or franchises, or establishing joint ventures for the ownership or operation of a Competing Business. This geographic scope extends to any location where Bft can demonstrate it has offered or sold franchises as of the termination or expiration date.
Furthermore, franchisees are barred from owning, maintaining, engaging in, or being employed by any other Competing Business at the Authorized Location or within a ten-mile radius of the Authorized Location. This ten-mile radius also applies to any other Bft studio owned by Bft, its affiliates, or any franchisee that is open, under lease, or otherwise under development as of the date the agreement expires or is terminated. If an owner of the Franchisee ceases to be an owner, they must also comply with these restrictions as if the agreement was terminated on the date they ceased to be an owner.