Can Bft use the Marks and System to engage in activities not expressly prohibited in the Bft Franchise Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
e under that agreement. Otherwise, we will not modify the size of your Development Area except by mutual written agreement signed by both parties.
Reserved Rights
We and our parents/affiliates reserve the exclusive right to conduct the following activities under the Franchise Agreement and/or Multi-Unit Agreement (as appropriate): (i) establish and operate, and license any third party the right to establish and operate, other Studios and Studios using the Marks and System at any location outside of your Designated Territory(ies) and, if applicable, Development Area; (ii) market, offer and sell products and services that are similar to the products and services offered by the Studio under a different trademark or trademarks at any location, within or outside the Designated Territory(ies) and, if applicable, the Development Area; (iii) use the Marks and System, as well as other such marks we designate, to distribute any Approved Products and/or Approved Services in any alternative channel of distribution, within or outside the Designated Territory(ies) and Development Area (including the Internet and other e-commerce channels and streaming platforms; wholesale
stores, retail stores, catalog sales, etc.) as further described below; (iv) to acquire, merge with, or otherwise affiliate with, and after that own and operate, and franchise or license others to own and operate, any business of any kind, including, without limitation, any business that offers products or services the same as or similar to the Approved Products and Approved Services (but under different marks), within or outside your Designated Territory(ies) and, if applicable, Development Area; (v) use the Marks and System, and license others to use the Marks and System, to engage in any other activities not expressly prohibited in your Franchise Agreement and, if applicable, your Multi-Unit Agreement; and (vi) open and operate, or license third parties the right to open or operate, Studios at "Non-Traditional Sites" both within and outside the Designated Territory and, if applicable, Development Area. "Non-Traditional Site" means any location that is situated within or as part of a larger venue or facility and, as a result, is likely to draw the predominance of its customers from those persons who are using or attending events in the larger venue or facility (for example, "big box" gyms and/or fitness facilities, cruise ships, military bases, shopping malls, airports, sports facilities and stadiums, industrial or office complexes, hotels, train stations and other transportation facilities, travel plazas, casinos, hospitals, theme parks, convention centers, colleges/universities, multi-unit residential properties, and other similar captive market locations).
Neither the Franchise Agreement nor the Multi-Unit Agreement grants you any right to engage in any of the activities outlined in the preceding paragraph, or to share in any of the proceeds received by us, our parent/affiliates or any third party from these activities, unless we otherwise agree in writing. Further, we have no obligation to provide you any compensation for soliciting or accepting orders (via alternate channels of distribution) within your Designated Territory.
Internet Sales / Alternative Channels of Commerce
We may sell products and services to members located anywhere, even if such products and services are similar to what we sell to you and what you offer at your Studio. We may use the internet or alternative channels of commerce to sell products and services branded with the Marks.
Source: Item 12 — TERRITORY (FDD pages 50–54)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, Bft reserves the right to use the Marks and System to engage in activities not expressly prohibited in the Franchise Agreement. This means Bft can explore business opportunities using its trademarks and operational methods, as long as these activities aren't specifically forbidden in the franchise agreement.
This clause provides Bft with considerable flexibility to adapt and expand its business model. For a potential franchisee, this implies that Bft could diversify into new areas or channels, potentially impacting the franchisee's business. It is important to note that Bft has the right to market and sell products and services similar to those offered by the Studio under different trademarks, within or outside the Designated Territory. Bft also reserves the right to distribute approved products and services through alternative channels of distribution, including the internet and e-commerce platforms.
Bft's ability to operate or license Studios or distribution channels of any type, regardless of their location or proximity to a franchisee's Designated Territory, and whether or not they provide similar services, is also a key consideration. This could lead to increased competition for franchisees, especially if Bft introduces new brands or channels that directly compete with existing Bft studios. Franchisees do not have any rights with respect to other businesses, products, or services in which Bft may be involved, now or in the future.
While Bft retains these rights, franchisees are protected by the fact that Bft will not operate or grant a license to a third party to operate a Studio within the Designated Territory as long as the franchisee is in compliance with the Franchise Agreement. However, this protection is subject to Bft's reserved rights, meaning that Bft can still engage in activities that might indirectly compete with the franchisee's business. Therefore, prospective franchisees should carefully consider the potential impact of Bft's reserved rights on their investment and business operations.