Under the Bft franchise agreement, is the Developer considered an affiliate of the Franchisor?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Despite any assistance Franchisor may provide, Developer is entirely responsible to locate and present to Franchisor proposed sites for Studios in the Development Area as necessary to comply with the Development Schedule (each a "Site"). Developer agrees to give Franchisor all information and materials it requests to assess each proposed Site as well as Developer's and its proposed affiliate's financial and operational ability to develop and operate a Studio at the proposed Site. Franchisor has the absolute right to reject any site or any affiliate (a) that does not meet Franchisor's criteria or (b) if Developer or its affiliates are not then in compliance with any existing Franchise Agreements executed pursuant to this Agreement or operating its or their Studios in compliance with the mandatory specifications, standards, operating procedures and rules that Franchisor periodically prescribes for operating Studios. Franchisor agrees to use its reasonable efforts to review and evaluate the proposed Sites within 30 days after it receives all requested information and materials. If Franchisor accepts a proposed Site, Developer (or its approved affiliate) must timely sign a separate Franchise Agreement for the Site as described in Section 2.E below.
- E. Execution of Franchise Agreements. Simultaneously with the execution of this Agreement, Developer (or its approved affiliate) must sign and deliver to Franchisor a Franchise Agreement and related documents representing the first Franchise that Developer is obligated to acquire under this Agreement. Developer (or its approved affiliate) must thereafter conduct its Soft Opening and operate a Studio according to the terms of that Franchise Agreement. Thereafter, once Franchisor has accepted a Site, and prior to signing a lease or otherwise securing possession of the Site, Developer (or its approved affiliate) must sign Franchisor's then-current form of Franchise Agreement (including, without limitation,
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 Developer is not explicitly defined as an affiliate of the Franchisor in the agreement itself. However, the document does refer to the Developer's affiliates in several contexts, implying a distinction between the Developer and its affiliates.
Specifically, the FDD outlines that the Developer is responsible for locating sites for Bft studios and must provide information about both the Developer's and its proposed affiliate's financial and operational ability to develop and operate a studio at the proposed site. Bft has the right to reject any site or affiliate that doesn't meet its criteria or if the Developer or its affiliates are not in compliance with existing franchise agreements. This suggests that while the Developer is a separate entity, their affiliates are also subject to Bft's approval and compliance standards.
Furthermore, the agreement states that the Developer (or its approved affiliate) must sign franchise agreements. Bft may refuse to issue a Franchise Agreement if it has not approved the Developer's proposed affiliate or if the Developer and its affiliates are not in compliance with agreements with Bft or its affiliates. This highlights the importance of the relationship between the Developer, its affiliates, and Bft, emphasizing that the actions and compliance of the affiliates can impact the Developer's ability to obtain and maintain franchises. Therefore, while not directly an affiliate of Bft, the Developer's affiliates are subject to scrutiny and must meet certain standards for the Developer to successfully operate Bft franchises.