factual

What specific aspects of Article 13 relate to the Bft franchisee's covenants not to compete?

Bft Franchise · 2025 FDD

Answer from 2025 FDD Document

themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation own, maintain, engage in, be employed or serve as an officer, director, or principal of, lend money or extend credit to, lease/sublease space to, or have any interest in or involvement with any fitness or exercise business (except a business that it operates

pursuant to a franchise agreement with Franchisor or its affiliates), any fitness or exercise marketing or consulting business, any business offering products of a similar nature to those of the Studio, or in any business or entity which franchises, licenses or otherwise grants to others the right to operate such aforementioned businesses (each a "Competing Business"). Franchisee further agrees that, during the Term, the Restricted Parties shall not divert, or attempt to divert, any customer or prospective customer to a Competing Business in any manner.

  • B. After the Term of this Agreement. Franchisee agrees that, unless (and then only to the extent) prohibited by Applicable Law, Franchisee, the Restricted Parties, and its owners will comply with the following:
  • (1) Prohibition on Franchising Activities. For two (2) years after the expiration or termination (by Franchisor or by Franchisee for any reason) of this Agreement or after Franchisee has assigned its interest in this Agreement, neither Franchisee nor any other Restricted Party will, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership or corporation, be involved with any business that competes in whole or in part with Franchisor by offering or granting licenses or franchises, or establishing joint ventures, for the ownership or operation of a Competing Business. The geographic scope of the covenant contained in this Section is any location where Franchisor can demonstrate it has offered or sold franchises as of the date this Agreement is terminated or expires.
  • (2) Prohibition on Competing Businesses. For two (2) years after the expiration or termination (by Franchisor or by Franchisee for any reason) of this Agreement or after Franchisee has assigned its interest in this Agreement, neither Franchisee nor any other Restricted Party will own, maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend credit to, lease/sublease space to, or have any interest in or involvement with, any other Competing Business: (i) at the Authorized Location; or (ii) within a ten (10)-mile radius of (a) the Authorized Location, or (b) any other BFT Studio owned by Franchisor, its affiliates, or any franchisee, which is open, under lease or otherwise under development as of the date this Agreement expires or is terminated.
  • (3) Transfer of All Ownership Interests. If an owner of Franchisee ceases to be an owner of Franchisee for any reason, the former owner shall comply with the provision of this Section 13.1.B as though this Agreement were terminated as of the date on which the owner ceased to be an owner.

13.2 Non-Solicitation Covenants.

  • A. During the Term of this Agreement.

Source: Item 23 — RECEIPTS (FDD pages 79–265)

What This Means (2025 FDD)

According to the 2025 Bft Franchise Disclosure Document, Article 13 outlines the franchisee's obligations regarding non-solicitation and non-competition both during and after the term of the franchise agreement. During the term, the franchisee cannot divert or seek to divert customers from another Bft studio to their own.

After the agreement expires or terminates, the franchisee is restricted for two years. During this time, they cannot solicit business from customers of their former Bft studio or any other Bft studio. They are also prohibited from contacting Bft's suppliers or vendors for any competitive business purpose. Furthermore, for two years, the franchisee cannot be involved with any business that competes with Bft by offering or granting licenses or franchises, or establishing joint ventures for Competing Businesses, in any location where Bft has offered or sold franchises as of the termination date.

The franchisee also cannot own, maintain, engage in, be employed by, lend money to, lease space to, or have any interest in any Competing Business at the Authorized Location or within a ten-mile radius of the Authorized Location or any other Bft studio. If an owner of the franchise ceases to be an owner, they must also comply with these non-compete provisions as if the agreement was terminated on the date they ceased to be an owner. The FDD states that if a franchisee fails to comply with the covenants not to compete as required in Article 13, it constitutes grounds for termination of the franchise agreement.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.