What specific actions constitute a failure to comply with the covenants not to compete for a Bft franchisee?

According to the 2025 Bft Franchise Disclosure Document, a franchisee's failure to comply with the covenants not to compete as required in Article 13 constitutes a default under the franchise agreement. This is explicitly stated as one of the reasons for termination of the agreement.

Article 13 outlines specific restrictions both during and after the term of the agreement. During the term, a franchisee cannot divert or seek to divert customers from another Bft studio to their own. After the term, for a period of two years following termination or expiration of the agreement, the franchisee and related parties are restricted from involvement in any business that competes with Bft by offering or granting licenses or franchises, or establishing joint ventures for a competing business. This restriction applies in any location where Bft has offered or sold franchises as of the termination date.

Additionally, for two years post-termination, the franchisee and related parties are prohibited from owning, maintaining, engaging in, or being involved with any other competing business within the authorized location or within a ten-mile radius of the authorized location or any other Bft studio owned by Bft, its affiliates, or any franchisee. These non-compete obligations also extend to former owners of the franchise if they cease to be an owner, as if the agreement were terminated on the date they ceased to be an owner. These restrictions are designed to protect Bft's business model and market presence.