Does Bft reserve rights not expressly granted to the Developer in the Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
For the avoidance of doubt, Franchisor reserves for itself and its affiliates all rights not expressly granted to Developer in this Agreement and the right to do all things that Franchisor does not expressly agree in this Agreement not to do, in each case, without regard to proximity to the Development Area and without any compensation to Developer, and on such terms and conditions as Franchisor deems appropriate. Without limitation, Franchisor and its affiliates may, themselves or through authorized third parties (and Developer is not granted the right to): (a) open and operate, and license third parties the right to open or operate, Studios utilizing the Marks and System outside the Development Area; (b) market, offer and sell products and services similar to those offered by Studios (such as private label products that Franchisor may develop and training programs) under a different trademark or trademarks at any location, both within or outside the Development Area; (c) use the Marks and other aspects of the System, as well as any other marks Franchisor may designate, to distribute products and services through alternate channels of distribution, including without limitation, via the Internet and other e-commerce channels, catalog sales, direct mail or wholesale, anywhere either within or outside the Development Area; (d) acquire, or be acquired by, or merge with, any company, including a company operating or licensing one or more businesses offering products or services similar to those offered by any Studio located within or outside the Development Area, and subsequently operate (or license a third-party the right to operate) these businesses and allow them to incorporate certain elements of the System (excluding the Marks and Trade Dress) regardless of location; (e) develop or become associated with and engage in other businesses, including other fitness concepts and systems, and/or award franchises under such other concepts for locations anywhere, including inside and outside of the Development Area; (f) use the Marks and System, and license others to use the Marks and System, to engage in any other activities not expressly prohibited by this
Agreement; and (g) open and operate, or license third parties the right to open or operate, Studios at Non-Traditional Locations both within and outside the Development Area.
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, Bft retains all rights not explicitly granted to the Developer in the agreement. This means Bft has the authority to undertake any actions not specifically prohibited in the agreement, without needing to compensate the Developer or consider the proximity to the Development Area. These rights can be exercised under terms and conditions that Bft deems appropriate.
Specifically, Bft reserves the right to operate or license others to operate studios outside the Development Area, market and sell similar products under different trademarks, and use the Bft marks and system through alternative distribution channels like the internet or wholesale. Bft can also acquire or merge with other companies, even those offering similar services, and develop or associate with other fitness concepts, awarding franchises for these concepts anywhere, including within the Development Area.
Furthermore, Bft can use the marks and system for activities not expressly prohibited by the agreement and operate or license studios at Non-Traditional Locations both within and outside the Development Area. Non-Traditional Locations include venues like gyms, cruise ships, military bases, shopping malls, airports, sports facilities, hotels, casinos, and universities.
This reservation of rights allows Bft significant flexibility in its business operations and future strategies, which could potentially impact the Developer's business. A prospective franchisee should carefully consider these reserved rights and discuss with Bft how these rights might be exercised and what protections, if any, the franchisee would have.