What agreements should I read to understand the franchise relationship with Bhc, as mentioned in Item 17?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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Item 17: Renewal, Termination, Transfer, And Dispute Resolution
THE FRANCHISE RELATIONSHIP
This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the agreement attached to this Disclosure Document. You should refer to your state's specific addenda attached to this Disclosure document for exceptions to this Item 17.
| Provision | Section in | Summary |
|---|---|---|
| Multi-Unit Master Franchise Agreement | (if the amount in controversy is less than $250,000 - https://www.jamsadr.com/rules-streamlined- arbitration/) or its Comprehensive Arbitration Rules and Procedures (if the amount in controversy is $250,000 or more - https://www.jamsadr.com/rules- comprehensive-arbitration/). Or, if the parties mutually agree, the dispute may be submitted to arbitration conducted by and before another mutually acceptable arbitrator. | |
| w. Choice of forum | 14.1, 14.2 | Mediation and arbitration proceedings will take place in Los Angeles County, California. Any litigation proceedings will take place in an appropriate court in California. |
| x. Choice of law | 16.13 | California law governs the arbitration of disputes under the MFA. |
| Provision | Section in Multi-Unit Master Franchise Agreement | Summary Restaurants in the Development Area under the Development Schedule. |
| e. Termination by franchisor without cause | 13.1 | We can terminate the MFA if you are in breach of that agreement (This provision is subject to state law.) |
| f. Termination by franchisor with cause | 13.2 | We can terminate the MFA if you are in material breach of that agreement (This provision is subject to state law.) |
| g. "Cause" defined – curable defaults | 13.1 | You have 30 days after notice to cure monetary defaults and other defaults (including defaults under a lease for your Master Franchise BHC Restaurants) that can be cured. (This provision is subject to state law.) |
| h. "Cause" defined – non-curable defaults | 13.2 | Non-curable defaults: your bankruptcy or insolvency; your abandonment of the franchised business; you make material misrepresentations relating to your acquisition of the Franchise or you engage in conduct that reflects materially and unfavorably upon the operation and reputation of the Master Franchised Business or the BHC System; you and us agree in writing to terminate the Franchise; you fail, for a period of 10 days after notification of noncompliance, to comply with any federal, state or local law or regulation applicable to the operation of the Franchise; after curing any default, you engage in the same noncompliance whether or not such noncompliance is corrected after notice; you repeatedly fail to comply with one or more material requirements of the MFA, whether or not corrected after notice; the Franchised Business or your Master Franchise BHC Restaurant is seized, taken over, or foreclosed by a government official, creditor, lien holder or lessor, or that a final judgment against you remains unsatisfied for 30 days; you are convicted of a felony or any other criminal misconduct that is relevant to the operation of the Franchise; an audit or investigation conducted by us reveals that you knowingly maintained false books or records; or submitted false reports to us, or knowingly understated your Gross Revenue or withheld the reporting of any of your Gross Revenue (see further information in Section 13.2(a)(x)); |
Source: Item 17 — Renewal, Termination, Transfer, And Dispute Resolution (FDD pages 43–49)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Item 17 highlights the importance of carefully reviewing the franchise and related agreements to fully understand the franchise relationship. The FDD indicates that prospective franchisees should refer to the specific agreements attached to the Disclosure Document, as well as any state-specific addenda, to understand the provisions related to renewal, termination, transfer, and dispute resolution.
Specifically, the Multi-Unit Master Franchise Agreement (MFA) is a critical document. Item 17 provides a table summarizing key provisions within the MFA, such as non-competition covenants, modification terms, integration clauses, and dispute resolution processes. These summaries offer a high-level overview, but the actual agreement contains the complete and legally binding terms.
The integration/merger clause in Section 16.14 of the MFA states that only the Franchise Agreement, MFA, other signed agreements, and the Operations Manual's requirements, procedures, and policies are binding. This clause also clarifies that any representations or promises made outside of the Disclosure Document, Franchise Agreement, and MFA may not be enforceable. However, it also specifies that nothing in these agreements disclaims representations made within the Franchise Disclosure Document itself. Therefore, it is important to rely on the written agreements and the FDD for understanding the full scope of the Bhc franchise relationship.