During the term of the Bft franchise agreement, are the franchisee's immediate family members also subject to the non-competition covenants?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
A. During the Term of this Agreement. Franchisee agrees that neither Franchisee, its principals, owners, or guarantors, nor any immediate family of Franchisee, its principals, owners, or guarantors ("Restricted Parties"), will, directly or indirectly, for 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.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, the non-competition covenants extend to the franchisee's immediate family. During the term of the franchise agreement, these restrictions apply not only to the franchisee, their principals, owners, and guarantors, but also to their immediate family members. These 'Restricted Parties' are prohibited from engaging in or having any interest in a Competing Business. This includes owning, maintaining, being employed by, or serving as an officer, director, or principal of any fitness or exercise business (excluding other Bft franchises), fitness or exercise marketing or consulting business, or any business offering similar products to Bft studios.
This non-compete agreement also prevents the Restricted Parties from diverting or attempting to divert any customer or prospective customer to a Competing Business. This is a significant restriction, as it limits the business activities of the franchisee's immediate family, meaning they cannot be involved in any competing fitness ventures during the term of the Bft franchise agreement. The definition of 'immediate family' is not provided in this excerpt.
After the franchise agreement expires or is terminated, the non-competition covenants continue to apply to the franchisee and other Restricted Parties for a period of two years. During this post-term period, they are prohibited from being involved with any business that competes with Bft by offering or granting licenses or franchises for the ownership or operation of a Competing Business. They are also restricted from owning, maintaining, or being involved with any other Competing Business within a ten-mile radius of the Authorized Location or any other Bft Studio. These restrictions are subject to applicable laws and may be modified by Bft at its discretion.
Bft includes these non-competition covenants to protect its legitimate business interests and the integrity of its system. The FDD states that violating these covenants will cause irreparable injury to Bft, entitling them to injunctive relief, damages, and an equitable accounting of earnings. Franchisees should carefully consider these restrictions and their potential impact on their family members' business activities before investing in a Bft franchise.