Under what circumstances can Bft terminate the Franchise Agreement without providing an opportunity to cure?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Termination Without Cure Opportunity. Franchisor may terminate this Agreement and all rights granted hereunder, without affording Developer any opportunity to cure, effective immediately upon delivery of written notice, if:
(a) Developer has made any material misrepresentation or omission in the Application Materials or otherwise in connection with applying for the Development Rights or in acquiring the rights granted under any other agreement between Developer or its affiliates and Franchisor or any of Franchisor's affiliates;
(b) Developer experiences any of the following events: (i) it admits its inability, or is unable, to pay its debts as they become due or perform its obligations under this Agreement, (ii) it makes an assignment for the benefit of creditors, (iii) it files a petition in bankruptcy, or an involuntary petition in bankruptcy is filed against it, (iv) a receiver is appointed for its business, (v) a final judgment against it remains unsatisfied or of record for at least 30 days, or (vi) it is dissolved or liquidated;
(c) Developer fails to satisfy any requirement under the Development Schedule;
(d) Developer or any of its principal officers, directors, partners, managing members or owners who have signed a Guarantee is convicted of or pleads no contest to a felony or other crime or offense that, in Franchisor's reasonable opinion, adversely affects the reputation of the System or the goodwill associated with the Marks;
(e) Developer falsifies any financial reports, records, or other information required to be provided by Developer to Franchisor under this Agreement;
(f) A Restricted Party fails to comply with the Noncompetition Restrictions set forth in Article 6 herein;
(g) Developer or its owners make an unauthorized direct or indirect Transfer or attempted or purported Transfer; or
(h) Developer commits or suffers a default of: (i) a provision of this Agreement within six (6) months following a previous violation of the same provision, or (ii) its obligations under this Agreement on three (3) or more separate occasions within any 12-consecutive-month period, in either case regardless of whether Franchisor notifies Developer of the defaults or the defaults are subsequently cured.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, Bft can terminate the Franchise Agreement without giving the franchisee an opportunity to cure under several specific circumstances. These include making any material misrepresentation or omission in the application materials when applying for development rights or acquiring rights under any agreement with Bft.
Bft can also terminate the agreement without a cure period if the franchisee experiences events such as admitting inability to pay debts, making an assignment for the benefit of creditors, filing for bankruptcy, having a receiver appointed for their business, having a final judgment unsatisfied for at least 30 days, or being dissolved or liquidated. Failure to meet any requirement under the Development Schedule also allows for immediate termination.
Further, Bft can immediately terminate the agreement if the franchisee, or any principal officer, director, partner, managing member, or owner who has signed a guarantee, is convicted of or pleads no contest to a felony or any crime that adversely affects Bft's reputation or goodwill. Other causes for immediate termination include falsifying financial reports, records, or other required information, a restricted party failing to comply with noncompetition restrictions, or making an unauthorized transfer of the franchise. Additionally, if a franchisee defaults on any provision of the agreement within six months of a previous violation of the same provision, or defaults on obligations under the agreement on three or more occasions within a 12-month period, Bft can terminate the agreement immediately without opportunity to cure.