According to Bhc, what does the term 'Affiliates' mean in the context of the Acknowledgment?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. The Prospective Franchisee represents, warrants and covenants to BHC USA LLC ("BHC") that all of the following matters are true and accurate as of the date of execution of this Acknowledgment and Authorization for Background Check ("Acknowledgment"):
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- No Prospective Franchisee and his/her/its Affiliates (as that term is defined below) had or has any relationship, affiliation, or ownership interest, directly or indirectly, with BHC USA or its Affiliates ("Prohibited Persons"). "Affiliates" mean a party's respective present and former, direct and indirect, parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses (for individuals), including any other person directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such person. "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
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Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the term 'Affiliates,' within the Acknowledgment section, is defined broadly. It encompasses a party's present and former direct and indirect parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses (for individuals). This definition extends to any other person or entity that directly or indirectly controls, is controlled by, or is under common control with the party in question through one or more intermediaries.
The definition of 'Control' is also specified, meaning the power to direct or influence the management and policies of a person, whether through ownership of voting securities, by contract, or other means. This broad definition is crucial because it impacts the representations and warranties a prospective franchisee makes to Bhc. Specifically, the franchisee must disclose any relationships, affiliations, or ownership interests with Bhc USA or its affiliates, ensuring no prohibited persons are involved with the franchisee's operations.
This definition is important for prospective franchisees as it requires them to be transparent about all related parties and their connections to Bhc. Failure to disclose such relationships could lead to legal issues or termination of the franchise agreement. Bhc aims to prevent conflicts of interest and ensure that all franchisees operate independently from individuals or entities that could potentially have an adverse impact on the brand. Therefore, franchisees must carefully review their associations and ownership structures to comply with this requirement.