Are there any exceptions to the post-term non-compete restrictions for a Bft franchise?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, the post-term non-compete restrictions may not apply to a franchisee to the extent prohibited by applicable law. After the franchise agreement expires or terminates, the franchisee and other restricted parties are subject to non-compete restrictions for two years.
The franchisee is restricted from involvement with any business that competes with Bft by offering or granting licenses or franchises, or establishing joint ventures, for the ownership or operation of a competing business. This restriction applies to any location where Bft can demonstrate it has offered or sold franchises as of the date the agreement is terminated or expires.
Additionally, the franchisee cannot own, maintain, engage in, be employed by, lend money to, extend credit to, lease space to, or have any interest in any other competing business at the authorized location or within a 10-mile radius of the authorized location or any other Bft studio owned by Bft, its affiliates, or any franchisee that is open, under lease, or otherwise under development as of the date the agreement expires or is terminated. If an owner of the franchisee ceases to be an owner, they must comply with these provisions as if the agreement were terminated on the date they ceased to be an owner.