Under what conditions will the Washington Securities Division allow Bft Franchisor to discontinue the surety bond?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS RIDER is made and entered into by and between | BFT FRANCHISE SPV, LLC, a |
|---|---|
| Delaware limited liability company with | its principal business address at 17877 Von Karman Ave., Suite |
| 100 Irvine, CA 92614 ("Franchisor"), and, whose | |
| principal business address is | ("Franchisee"). |
| 1. | |
| Background. Franchisor and Franchisee are parties to that certain Franchise Agreement dated | |
| , 20 (the "Franchise Agreement") that has been signed concurrently | |
| with the signing of this Rider. This Rider is annexed to and forms part of the Franchise Agreement. This | |
| Rider is being signed because (a) the offer is directed into the State of Washington and is received where it | |
| is directed; or | (c) the Studio that Franchisee |
| (b) Franchisee is a resident of the State of Washington; or | |
| develops under its Franchise Agreement is or will be located or operated, wholly or partly, in the State of | |
| Washingto |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Washington Securities Division requires Bft to maintain a $100,000 surety bond as a condition for issuing the franchise permit. This bond ensures that Bft complies with Washington's franchise regulations and protects franchisees in the state. Bft must maintain this surety bond coverage until certain conditions are met.
The Washington Securities Division will allow Bft to discontinue the surety bond under two specific circumstances. First, Bft can discontinue the bond if all Washington franchisees have (1) received all pre-opening obligations that they are entitled to under the franchise agreement or offering circular, and (2) are open for business. This means that once every Bft franchisee in Washington has completed their initial training and has commenced operations, the surety bond is no longer required.
Alternatively, Bft can discontinue the surety bond if the Administrator of the Washington Securities Division issues written authorization to the contrary. This provides a mechanism for the Administrator to waive the surety bond requirement at their discretion, potentially based on Bft's demonstrated compliance and financial stability. A prospective franchisee in Washington should confirm with Bft whether all existing franchisees have completed their pre-opening obligations and are open for business, or if Bft has obtained written authorization from the Administrator to discontinue the surety bond. This information is crucial for understanding the financial protections in place.