Under what condition would the termination of the Bft agreement also lead to the termination of existing Franchise Agreements?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Expiration or termination of this Agreement does not impact the continued existence of any Franchise Agreements that are, as of such time, already fully executed unless, in the case of termination, the grounds for termination are also bases for termination under the Franchise Agreements and such Franchise Agreements are expressly terminated.
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, the expiration or termination of the agreement does not automatically terminate existing Franchise Agreements. However, if the grounds for termination of the agreement also constitute grounds for termination under the individual Franchise Agreements, and Bft expressly terminates those Franchise Agreements, then the existing agreements will also be terminated.
This means that a Bft franchisee's existing franchise agreements remain in effect even if the main agreement is terminated, unless the reasons for terminating the main agreement are also valid reasons to terminate the individual franchise agreements. For example, if the main agreement is terminated due to a breach of contract that also violates the terms of the individual franchise agreements, Bft may choose to terminate those agreements as well.
For a prospective Bft franchisee, this clause offers some protection. It ensures that termination of a broader agreement (like a multi-unit agreement) does not automatically invalidate existing, operational franchises. However, it's crucial to understand what constitutes grounds for termination in both the main agreement and the individual franchise agreements to assess the risk of simultaneous termination. Franchisees should seek legal counsel to fully understand these termination conditions and their implications.