Under what circumstances is a Bft franchisee responsible for the franchisor's legal fees related to modifications of the Franchise Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Apart from the obligations in Sections 16.11.A and 16.11.B, Franchisee agrees and acknowledges that it will be responsible for the legal fees and other costs that Franchisor incurs in connection with certain modifications that Franchisor agrees to make to the Franchise Agreement, including without limitation, modifications made to address the following situations: (i) relocation; or (ii) any other amendment to extend a given performance deadline of Franchisee, modify the Designated Territory awarded hereunder, or otherwise modify, amend or supplement this Agreement in any way at the request of Franchisee or as necessary for Franchisee to avoid this Agreement being in default or subject to termination.
Franchisor may set forth flat fee amounts designed to help defray the costs associated with addressing certain of the foregoing situations in the context of this Agreement or any other agreement with Franchisor, whether in the Learning Management System or otherwise in a writing distributed to System franchisees.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, a franchisee may be responsible for the franchisor's legal fees and other costs if the franchisor agrees to make certain modifications to the Franchise Agreement. These modifications include, but are not limited to, changes made to address relocation or any amendment to extend a performance deadline, modify the designated territory, or otherwise alter the agreement at the franchisee's request. This also applies if the modifications are necessary for the franchisee to avoid being in default or subject to termination of the agreement.
Bft may set flat fee amounts to help cover the costs associated with addressing these situations, and this information may be found in the Franchise Agreement, the Learning Management System, or other written communications distributed to franchisees. This means that if a franchisee needs to change their location, requests an extension on a deadline, or wants to modify their territory, they may have to pay Bft's legal fees for drafting and implementing these changes.
This provision is important for prospective franchisees to consider, as it highlights potential costs beyond the initial franchise fee and ongoing royalties. Franchisees should carefully evaluate their operational plans and financial projections to account for these possible expenses. Understanding the circumstances under which they might incur these legal fees can help franchisees better manage their business and avoid unexpected costs during the term of the agreement.