Under what condition can Bft withhold payments from a franchisee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.12 No Withholding of Payments. Franchisee shall not withhold all or any part of any payment to Franchisor or any of its affiliates on the grounds of Franchisor's alleged nonperformance or as an offset against any amount Franchisor or any of Franchisor's affiliates allegedly may owe Franchisee under this Agreement or any related agreements.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from withholding payments to Bft or its affiliates under any circumstances. The franchise agreement states that a franchisee cannot withhold any portion of a payment due to alleged nonperformance by Bft or as an offset against any amount Bft or its affiliates may allegedly owe the franchisee.
This clause is designed to ensure a consistent revenue stream for Bft, regardless of any disputes or claims a franchisee may have. It places the onus on the franchisee to resolve disputes through other legal channels while continuing to meet their financial obligations to the franchisor. This type of provision is relatively common in franchise agreements, as it protects the franchisor's income and maintains financial stability within the franchise system.
For a prospective Bft franchisee, this means that they must continue to make all required payments, even if they believe Bft is in breach of the franchise agreement. Failure to make timely payments could result in penalties, legal action, or even termination of the franchise agreement. Therefore, it is crucial for franchisees to carefully assess their financial situation and ability to meet ongoing payment obligations before entering into the franchise agreement. If a franchisee has a dispute with Bft, they must pursue resolution through the methods outlined in the agreement without disrupting the payment schedule.