What are the obligations of a Bft developer upon termination or expiration of the Development Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Obligations of Developer upon Termination or Expiration.
Immediately upon termination or expiration of this Agreement for any reason:
(1) All rights and privileges granted by Franchisor to Developer shall immediately cease and be null and void and of no further force and effect, and all such rights and privileges shall immediately revert to Franchisor; and
(2) Developer and the Restricted Parties shall comply with the Noncompetition Restrictions set forth in Article 6 of this Agreement and all other obligations that are triggered by or, either expressly or by their nature, are intended to survive the termination or expiration of this Agreement.
Termination or expiration of this Agreement shall not affect, modify or discharge any claims, rights, causes of action or remedies, which Franchisor may have against Developer, whether under this Agreement or otherwise, for any reason whatsoever, whether such claims or rights arise before or after termination.
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, upon termination or expiration of the Development Agreement, the developer faces several obligations. All rights and privileges granted by Bft to the developer immediately cease and revert back to Bft. The developer and any restricted parties must adhere to the non-competition restrictions outlined in Article 6 of the agreement. They must also fulfill any other obligations that are triggered by, or by their nature, are intended to survive the termination or expiration of the agreement.
It's important to note that the termination or expiration of the Development Agreement does not impact any claims, rights, causes of action, or remedies that Bft may have against the developer. This means that Bft can still pursue legal action against the developer for any reason, regardless of whether the claims or rights arose before or after the termination.
In practical terms, this means a Bft developer must be prepared to immediately relinquish all franchise rights and cease operations under the Bft brand upon termination or expiration. The developer must also be aware of and comply with the non-compete clause, which restricts their ability to engage in similar business activities. Furthermore, the developer remains liable for any outstanding obligations or potential legal claims from Bft, even after the agreement ends. Prospective developers should carefully review Article 6 regarding non-competition and understand all the conditions that survive termination or expiration.