Under what condition will Bft make an assignment of contract?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| For value received, and in consideration for, and as an inducement to BFT Franchise SPV, LLC (the | |
|---|---|
| "Franchisor") to execute the Multi-Unit Agreement | |
| (the "Multi-Unit | |
| Agreement"), dated | |
| , 20 (the "Effective Date"), by and between Franchisor and or his | |
| assignee, if a partnership, corporation or limited liability company is later formed (the "Developer"), the | |
| undersigned (each a "Guarantor"), jointly and severally, hereby unconditionally guarantee to Franchisor | |
| and its successors and assigns the full and timely performance by Developer of each obligation undertaken | |
| by Developer under the terms of the Multi-Unit Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
Based on the 2025 FDD, Bft's Multi-Unit Agreement can be assigned to a franchisee's assignee if a partnership, corporation, or limited liability company is formed later. This is contingent on value being received and in consideration for Bft to execute the Multi-Unit Agreement. The execution of the Multi-Unit Agreement acts as an inducement for Bft to agree to the terms outlined in the agreement.
This condition ensures that Bft is compensated or receives something of value in return for allowing the contract to be assigned to another entity. This protects Bft's interests by ensuring that the new entity is properly structured and capable of fulfilling the obligations under the Multi-Unit Agreement. The guarantor is responsible for ensuring the developer fulfills their obligations under the Multi-Unit Agreement.
For a prospective Bft franchisee, this means that if they initially sign the Multi-Unit Agreement as an individual but later decide to form a business entity (like an LLC or corporation) to operate the franchise, Bft will allow the agreement to be assigned to that entity, provided that the initial agreement's conditions are met. This provides flexibility for the franchisee as their business evolves, but it also underscores the importance of understanding the initial terms and obligations of the Multi-Unit Agreement.