Is there anything a Bft developer is prohibited from doing that would prevent renewal or extension?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS RIDER (this "Rider") is made and entered into by and between BFT FRANCHISE SPV, |
|---|
| LLC, a Delaware limited liability company with its principal business address at 17877 Von Karman Ave., |
| Suite 100 Irvine, CA 92614 ("Franchisor"), and, |
| whose principal business address is |
| ("Developer"). |
| 1. |
| Background. Franchisor and Developer are parties to that certain Multi-Unit Agreement |
| dated |
| , 20 (the "Multi-Unit Agreement") that has been signed concurrently |
| with the signing of this Rider. This Rider supersedes any inconsistent or conflicting provisions of the Multi |
| Unit Agreement. Terms not otherwise defined in this Rider have the meanings as defined in the Multi-Unit |
| Agreement. |
| This Rider is annexed to and forms part of the Multi-Unit Agreement. This Rider is being |
| signed because (a) Developer is a resident of the State of Maryland; or |
| (b) the Studios that Developer |
| develops under the |
| Multi-Unit Agreement |
| are or will be developed |
| in the State of Maryland; or |
| (c) the offer |
| to sell is made in the State of Maryland; or |
| (d) the offer to buy is accepted in the State of Maryland. |
| 2. |
| Insolvency. |
| The following is added to the end of Section 8.A.(1)(b) (Termination of |
| Franchise by Franchisor) |
| of the Multi-Unit Agreement: |
| The provision which provides for termination upon Developer's |
| bankruptcy might not be |
| enforceable under federal bankruptcy law |
| (11 U.S.C. Sections 101 et seq.). |
| 3. |
| Release. The following is added to the end of Section 9.B |
| (Transfer of Interest - |
| By |
| Developer and its Owners) |
| of the Multi-Unit Agreement: |
| Pursuant to COMAR 02.02.08.16L, any release required as a condition of renewal and/or |
| assignment/transfer will not apply to claims arising under the Maryland Franchise |
| Registration and Disclosure Law. |
| 4. |
| Governing Law; Consent to Jurisdiction. The following is added to the end of Sections 12.A |
| (Governing Law) |
| and 12.F (Consent to Jurisdiction) |
| of the Multi-Unit Agreement: |
| ; provided, however, Developer |
| may bring a lawsuit in Maryland for claims arising under |
| the Maryland Franchise Registration and Disclosure Law. Maryland law may apply to |
| claims arising under the Maryland Franchise Registration and Disclosure Law. |
| 5. |
| Mediation; Mandatory Binding Arbitration. The following is added to the end of Sections |
| 12.C (Mediation) |
| and 12.D |
| (Mandatory Binding Arbitration) |
| of the Multi-Unit Agreement: |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
The 2025 Bft Franchise Disclosure Document includes state-specific riders that address certain prohibitions related to franchise agreements. For instance, the Illinois rider states that any condition that waives compliance with the Illinois Franchise Disclosure Act or any other Illinois law is void. This protects franchisees in Illinois from unknowingly giving up their legal rights under Illinois law.
Similarly, the Maryland rider specifies that any release required as a condition of renewal or transfer will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law. This ensures that Bft developers in Maryland retain their rights to make claims under Maryland franchise law, even when renewing or transferring their franchise. The Maryland rider also notes that a provision allowing termination upon the developer's bankruptcy might not be enforceable under federal bankruptcy law.
For Bft developers in Minnesota and Washington, the FDD states that the Multi-Unit Agreement does not waive any liability Bft may have under the Washington Investment Protection Act, and that Minnesota law provides that no action may be commenced under Minn. Stat. Sec. 80C.17 more than 3 years after the cause of action accrues. These state-specific provisions modify the standard Multi-Unit Agreement to comply with local laws and protect the rights of Bft developers in those states. These riders highlight the importance of understanding the specific legal protections available in the franchisee's state.