What does the addendum to the lease for the Bhc Franchised Restaurant premises grant the Franchisor?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and Franchisee's landlord will be required by Franchisor to execute an addendum to Franchisee's lease (or other written agreement or written understanding incorporated in, or attached as a rider to, the lease) that (i) grants Franchisor an option to assume Franchisee's position as lessee under the lease for the Franchised BHC Restaurant premises if Franchisee is in material breach of either the lease for the Franchised BHC Restaurant premises (including an obligation of the landlord to notify Franchisor if Franchisee is in such breach) or this Agreement, (ii) grants Franchisor the right to assign the lease to a bona fide franchisee of the System after assuming the lease, and (iii) requires the landlord to fully cooperate with Franchisor in completing de-identification of the Franchised BHC Restaurant if this Agreement is terminated or expires without being renewed and Franchisor does not exercise its option to assume the lease for the Franchised BHC Restaurant premises.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the addendum to the lease for the Franchised Restaurant premises grants Bhc several rights. Specifically, it grants Bhc an option to assume the franchisee's position as lessee if the franchisee materially breaches the lease or the Franchise Agreement. The landlord is obligated to notify Bhc if the franchisee breaches the lease.
Additionally, the addendum grants Bhc the right to assign the lease to another qualified Bhc franchisee after assuming the lease. This provides Bhc with flexibility in maintaining a franchise presence at the location if the original franchisee fails.
Finally, the addendum requires the landlord to fully cooperate with Bhc in de-identifying the restaurant as a Bhc franchise if the Franchise Agreement is terminated or expires without renewal, and Bhc chooses not to assume the lease. This ensures that the Bhc brand is protected and that the premises no longer appear to be associated with Bhc if the franchise relationship ends and Bhc does not take over the location.