What is the required action for Bft Franchisor to maintain the surety bond coverage?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS RIDER is made and entered into by and between | BFT FRANCHISE SPV, LLC, a |
|---|---|
| Delaware limited liability company with | its principal business address at 17877 Von Karman Ave., Suite |
| 100 Irvine, CA 92614 ("Franchisor"), and, whose | |
| principal business address is | ("Franchisee"). |
| 1. | |
| Background. Franchisor and Franchisee are parties to that certain Franchise Agreement dated | |
| , 20 (the "Franchise Agreement") that has been signed concurrently | |
| with the signing of this Rider. This Rider is annexed to and forms part of the Franchise Agreement. This | |
| Rider is being signed because (a) the offer is directed into the State of Washington and is received where it | |
| is directed; or | (c) the Studio that Franchisee |
| (b) Franchisee is a resident of the State of Washington; or | |
| develops under its Franchise Agreement is or will be located or operated, wholly or partly, in the State of | |
| Washingto |
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, the Washington Securities Division has made the issuance of Bft's franchise permit contingent upon Bft maintaining a $100,000 surety bond. This coverage must be acceptable to the Administrator.
Bft is required to maintain this surety bond until one of two conditions is met. The first condition is that all Washington franchisees must have (i) received all pre-opening obligations that they are entitled to under the franchise agreement or offering circular, and (ii) are open for business. The second condition is if the Administrator issues written authorization stating that the surety bond is no longer required.
This requirement ensures that Bft franchisees in Washington have some financial protection in the event that Bft fails to meet its obligations. It is a fairly common practice for states to require surety bonds or other forms of financial assurance from franchisors, especially when they are new or have limited operating history. Prospective Bft franchisees in Washington should confirm with the Administrator that the surety bond is indeed active and what steps would be required to make a claim against it.