What action must a Prospective Franchisee take if Prohibited Persons have any right or legal relationship with them, according to Bhc?

According to Bhc's 2025 Franchise Disclosure Document, a prospective franchisee must immediately notify Bhc in writing if any Prohibited Persons have any right or legal relationship with them. This includes any claim/debt, employment, delegation, or other right or legal relationship, regardless of whether it is a real or borrowed name, or registered or non-registered.

This requirement is part of the acknowledgement that the prospective franchisee makes to Bhc, representing and warranting that neither they nor their affiliates have any relationship, affiliation, or ownership interest with Bhc USA or its affiliates, which are defined as "Prohibited Persons". The definition of "Affiliates" is broad, encompassing parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses, as well as anyone under common control.

The FDD also states that Prohibited Persons should not hold any interest in the prospective franchisee, nor have any management right, other substantial control, and/or claim against the prospective franchisee. This is to ensure that there are no conflicts of interest or undue influence in the operation of the franchise. Failing to disclose such relationships or providing false statements can lead to denial of the franchise application or termination of any agreements with Bhc, with Bhc reserving the right to pursue legal remedies.