Regarding Bft franchise transfers, does the FDD specify whether pending administrative actions alleging a felony against a transferring party would prevent the transfer?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
The 2025 Bft Franchise Disclosure Document (FDD) does not explicitly state whether a pending administrative action alleging a felony against a transferring party would prevent the transfer of a franchise. However, the FDD includes a section addressing administrative, criminal, or civil actions pending against Bft, its parent, predecessor, or affiliate, or persons identified in Item 2.
Specifically, the Bft FDD states that 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. This disclosure focuses on actions against the franchisor and related parties, not specifically on the transfer process of a franchise.
For a prospective Bft franchisee, it is important to note that while the FDD outlines certain legal and financial disclosures regarding the franchisor, it does not directly address the conditions under which a franchise transfer might be blocked due to pending legal issues of the transferring party. To gain clarity on this specific issue, a prospective franchisee should directly ask Bft about the policies and procedures regarding franchise transfers when a transferring party has pending administrative actions alleging a felony.