Under what circumstances can the Bft franchise agreement be terminated before the end of its term?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
3.1 Term. The term of this Agreement shall be for a period of ten (10) years beginning on the Effective Date, unless sooner terminated under Section 15 (the "Term").
3.3 Holdover. If, in its discretion and without seeking to enforce Franchisee's post-term obligations set forth in Section 15.3 of this Agreement, Franchisor suffers Franchisee's continued operation of its Studio pursuant to this Agreement beyond the expiration of the Term, such continuance of operations shall be deemed to be Franchisee's election to extend the Term on a month-to-month basis (the "Interim Period") and, in addition to all other rights Franchisor may have as a result of Franchisee's noncompliance with this Agreement, Franchisor may terminate this Agreement during the Interim Period in accordance with Section 15.1(A) and Section 15.1(B) below or, without any cause or reason, upon 30 days' prior written notice. The Interim Period shall be considered part of the Term. However, if Franchisee is granted a Successor Franchise, the term of the Successor Franchise Agreement will be deemed to have begun upon expiration of the Term of this Agreement, rather than the Interim Period. If Franchisor allows for an Interim Period, Franchisee must comply with all of its obligations under this Agreement during the Interim Period; provided, however, upon the commencement of the Interim Period, Franchisee (i) will be required to pay the then-current Royalty Fee (as defined in Section 5.2 of this Agreement), then-current Fund Contributions (as defined in Section 5.6 of this Agreement), and all other then-current fees required to be paid by franchisees, and (ii) must deliver an executed general release in the form and substance satisfactory to Franchisor, releasing any and all claims Franchisee and its related parties may have against Franchisor and its affiliates, and their respective owners, officers, directors, employees, agents, successors and assigns. By accepting any then-current fees, Franchisor does not waive any of its rights and remedies under this Agreement, including the right to terminate this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, the standard franchise agreement term is ten years, but it can be terminated sooner under certain conditions as described in Section 15 of the agreement.
Additionally, if Bft allows a franchisee to continue operating after the initial term on a month-to-month basis, known as the Interim Period, Bft can terminate the agreement during this period. This can be done according to specific sections (15.1(A) and 15.1(B)) of the agreement or without any specific cause, provided Bft gives 30 days' prior written notice. During this Interim Period, the franchisee must adhere to all obligations, including paying the current royalty and fund contributions, and must provide a general release of claims against Bft.
It is important for a prospective franchisee to carefully review Section 15 of the Bft franchise agreement to fully understand the circumstances under which early termination can occur, as this can have significant implications for their investment and business operations.