Does the restriction on Bft operating or granting rights to others within the Development Area apply to Non-Traditional Locations?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Development Area; Reservation Of Rights. The Development Rights may only be exercised for Studios to be located in the Development Area identified on Exhibit A hereto. As long as Developer is in compliance with this Agreement and except with respect to Non-Traditional Locations (defined below), Franchisor will not, during the Term, (1) operate, or grant the right to anyone else to operate, a Studio within the Development Area, or (2) grant Development Rights to anyone else to develop Studios within the Development Area. A "Non-Traditional Location" is (a) any location that is situated within or as part of a larger venue or facility and, as a result, is likely to draw the predominance of its customers from those persons who are using or attending events in the larger venue or facility (for example, "big box" gyms and/or fitness facilities, cruise ships, military bases, shopping malls, airports, sports facilities and stadiums, industrial or office complexes, hotels, train stations and other transportation facilities, travel plazas, casinos, hospitals, theme parks, convention centers, colleges/universities, multi-unit residential properties, and other similar captive market locations**)**.
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 restriction on Bft operating or granting rights to others within a Development Area does not apply to Non-Traditional Locations. Bft explicitly reserves the right to open or license others to open studios at Non-Traditional Locations, even within a franchisee's Development Area.
A "Non-Traditional Location" is defined as a location within a larger venue or facility that primarily draws customers from that venue, such as gyms, cruise ships, military bases, shopping malls, airports, sports facilities, industrial complexes, hotels, train stations, casinos, hospitals, theme parks, convention centers, colleges, residential properties, and similar captive market locations. This means that even if a Bft franchisee has exclusive development rights to a specific geographic area, Bft can still establish or authorize Bft studios in Non-Traditional Locations within that area.
This reservation of rights has significant implications for prospective Bft franchisees. While a franchisee may be granted a Development Area, Bft retains the flexibility to operate or franchise locations within Non-Traditional Locations inside that area. This could potentially lead to competition within the franchisee's territory, impacting their revenue and market share. Therefore, it is crucial for potential franchisees to carefully consider the presence and potential for Non-Traditional Locations within their Development Area and to discuss this aspect thoroughly with Bft before signing the franchise agreement.