Does Bft waive its rights to terminate the agreement by accepting fees during the Interim Period?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
If, in its discretion and without seeking to enforce Franchisee's post-term obligations set forth in Section 15.3 of this Agreement, Franchisor suffers Franchisee's continued operation of its Studio pursuant to this Agreement beyond the expiration of the Term, such continuance of operations shall be deemed to be Franchisee's election to extend the Term on a month-to-month basis (the "Interim Period") and, in addition to all other rights Franchisor may have as a result of Franchisee's noncompliance with this Agreement, Franchisor may terminate this Agreement during the Interim Period in accordance with Section 15.1(A) and Section 15.1(B) below or, without any cause or reason, upon 30 days' prior written notice. The Interim Period shall be considered part of the Term. However, if Franchisee is granted a Successor Franchise, the term of the Successor Franchise Agreement will be deemed to have begun upon expiration of the Term of this Agreement, rather than the Interim Period. If Franchisor allows for an Interim Period, Franchisee must comply with all of its obligations under this Agreement during the Interim Period; provided, however, upon the commencement of the Interim Period, Franchisee (i) will be required to pay the then-current Royalty Fee (as defined in Section 5.2 of this Agreement), then-current Fund Contributions (as defined in Section 5.6 of this Agreement), and all other then-current fees required to be paid by franchisees, and (ii) must deliver an executed general release in the form and substance satisfactory to Franchisor, releasing any and all claims Franchisee and its related parties may have against Franchisor and its affiliates, and their respective owners, officers, directors, employees, agents, successors and assigns. By accepting any then-current fees, Franchisor does not waive any of its rights and remedies under this Agreement, including the right to terminate this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft does not waive its rights to terminate the franchise agreement by accepting fees during the Interim Period. The Interim Period occurs if Bft allows the franchisee to continue operating the Studio beyond the original term's expiration. During this Interim Period, the franchisee must continue to meet all obligations under the agreement, including paying the then-current Royalty Fee, Fund Contributions, and all other then-current fees.
Even while accepting these fees during the Interim Period, Bft explicitly retains all rights and remedies under the agreement, including the right to terminate the agreement. This means that Bft can still terminate the agreement for any valid reason, even if they are accepting payments from the franchisee during this time.
This clause protects Bft by ensuring that accepting payments during a holdover period does not prevent them from addressing any breaches or issues with the franchisee's operation. For a franchisee, this means that continuing to pay fees during the Interim Period does not guarantee the continuation of the franchise relationship, and Bft can still decide to terminate the agreement.