Is Bft obligated to provide compensation to franchisees for soliciting or accepting orders within their Designated Territory through alternate channels of distribution?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Neither the Franchise Agreement nor the Multi-Unit Agreement grants you any right to engage in any of the activities outlined in the preceding paragraph, or to share in any of the proceeds received by us, our parent/affiliates or any third party from these activities, unless we otherwise agree in writing. Further, we have no obligation to provide you any compensation for soliciting or accepting orders (via alternate channels of distribution) within your Designated Territory.
Source: Item 12 — TERRITORY (FDD pages 50–54)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft has no obligation to compensate franchisees for soliciting or accepting orders within their Designated Territory via alternate channels of distribution. This means that Bft can engage in activities such as internet sales or other alternative channels of commerce within a franchisee's territory without having to share any of the proceeds or provide any compensation to the franchisee.
This policy has significant implications for prospective Bft franchisees. While franchisees operate their studios within a designated territory, Bft retains the right to market and sell products and services through other channels, potentially competing directly with the franchisee. The franchisee will not be entitled to any compensation from these sales, which could impact their revenue and profitability.
This is a fairly common practice in franchising, where franchisors often reserve the right to explore alternative distribution channels to maximize brand reach and revenue. However, it's crucial for potential Bft franchisees to understand this aspect of the agreement and assess how it might affect their business. Franchisees should consider the potential impact of online sales and other channels on their studio's performance and factor this into their financial projections.