Under what circumstances would an existing Bft franchisee be required to pay a sourcing fee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
l of our franchisees.
Note Regarding Sourcing Fees
If you are purchasing an existing Studio from a System franchisee and a franchise broker is owed a commission in connection with the purchase, you will pay a $30,000 sourcing fee to us, to help cover the commission owed to the broker, in lieu of the Initial Franchise Fee.
Additionally, if you are an existing franchisee and a franchise broker is owed a commission in connection with the purchase of your additional franchise(s) and/or Development Rights under a Multi-Unit Agreement based on a previously-made introduction to us or our affiliates, you will pay us an additional sourcing fee as follows: (i) if you acquire a single additional franchise, the sourcing fee will be $28,000 (in addition to the Initial Franchise Fee); (ii) if you acquire Development Rights under a Multi-Unit Agreement for the right to open two (2) additional Studios, then the sourcing fee will be $40,000 (in addition to your Development Fee); (iii) if you acquire Development Rights under a Multi-Unit Agreement for the right to open three (3) to five (5) Studios, then the sourcing fee will be $50,000 (in addition to your Development Fee); (iv) if you acquire Development Rights under a Multi-unit Agreement for the right to open six (6) to nine (9) Studios, then the sourcing fee will be $84,000 (in addition to your Development Fee); and (v) if you acquire Development Rights under a Multi-Unit Agreement for the right to open ten (10) or more Studios, then the sourcing fee will be $120,000 (in addition to your Development Fee). Any applicable sourcing fee will be due on the signing of your Franchise Agreement and/or Multi-Unit Agreement, will be fully earned upon payment, and will not be refundable under any circumstances. In this instance,
you will sign the Form of Sourcing Fee Addendum (Franchise Agreement), as attached as Exhibit L-1, and/or the Form of Sourcing Fee Addendum (Multi-Uni
Source: Item 5 — INITIAL FEES (FDD pages 18–21)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, an existing franchisee may be required to pay a sourcing fee in specific situations related to the purchase of additional franchises or development rights. If a franchise broker is owed a commission because of a previously-made introduction to Bft or its affiliates in connection with the purchase of additional franchises or Development Rights under a Multi-Unit Agreement, a sourcing fee will be required.
The sourcing fee structure varies depending on the number of additional studios the franchisee intends to open. For instance, if an existing Bft franchisee acquires a single additional franchise, the sourcing fee is $28,000, which is in addition to the Initial Franchise Fee. If the franchisee acquires Development Rights under a Multi-Unit Agreement to open two additional studios, the sourcing fee is $40,000, also in addition to the Development Fee. For Development Rights to open three to five studios, the sourcing fee increases to $50,000, while opening six to nine studios incurs an $84,000 sourcing fee. The highest sourcing fee, $120,000, applies when the franchisee acquires rights to open ten or more studios.
These sourcing fees are due upon signing the Franchise Agreement or Multi-Unit Agreement and are fully earned by Bft upon payment, with no refunds available under any circumstances. Franchisees will also be required to sign the Form of Sourcing Fee Addendum (Franchise Agreement) or the Form of Sourcing Fee Addendum (Multi-Unit Agreement), depending on the situation, as detailed in Exhibits L-1 and L-2 of the FDD. This fee is separate from the initial franchise fee and development fee, highlighting an additional cost that franchisees need to consider when expanding their Bft business.