What must be adequately provided for in the event of an individual Bhc Master Franchisee's death to ensure the transfer of interest?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) In the event of an individual Master Franchisee's death or the death of a Majority Equity Owner, such person's interest in this Agreement or its equity interest in the franchise entity must Transfer as soon as practicable (but not more than 270 days) after the date of death in accordance with such person's will or, if such person dies without a will, in accordance with laws of intestacy governing the distribution of such person's estate, provided that adequate provision is made for the management of the Franchised Business. If Franchisor determines (i) there is no imminent sale to a qualified successor or (ii) there is no heir or other Principal Equity Operator capable of operating the Franchise, Franchisor may
(but is not obligated to) immediately commence operating the BHC Restaurant on Master Franchisee's behalf for a period of up to 90 days, renewable as Franchisor deems necessary for up to one year and Franchisor will periodically discuss the status with the heirs of the decedent. Franchisor can place an interim manager Master Franchised BHC Restaurant, and Master Franchisee must pay Franchisor the manager's salary, transportation, lodging and related living expenses, and our management administration fee of 15%.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, in the event of the death of an individual Master Franchisee or a Majority Equity Owner, their interest in the Master Franchise Agreement or their equity interest in the franchise entity must be transferred as soon as practicable, but no more than 270 days after the date of death. This transfer must be in accordance with the person's will or, if they die without a will, according to the laws of intestacy governing the distribution of their estate.
Crucially, adequate provision must be made for the management of the Bhc Franchised Business during this transition. If Bhc determines that there is no imminent sale to a qualified successor or no heir capable of operating the franchise, Bhc has the option, but not the obligation, to immediately commence operating the Bhc Restaurant on behalf of the Master Franchisee for up to 90 days, with renewals as deemed necessary by Bhc for up to one year.
During this period, Bhc can place an interim manager at the Bhc Restaurant, and the Master Franchisee's estate is responsible for paying the manager's salary, transportation, lodging, related living expenses, and a management administration fee of 15%. This ensures the continued operation of the Bhc Restaurant and protects the brand's interests while the transfer of ownership is being sorted out.