Can Bhc alter the Development Area without the franchisee's agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
s) or (16) any similar area to the sites referenced herein (individually and collectively, "Captive Location(s)).We may not alter the Development Area without your written agreement. However, we may
terminate the MFA if you (i) fail to meet the Development Schedule; (ii) fail to comply with any other terms and conditions of the MFA; (iii) make or attempt to make a transfer or assignment in violation of the MFA; or (iv) fail to comply with the terms and conditions of any individual MFA or of any other agreement to which you and we or our affiliates are parties.
We do not currently, nor do we have any plans in the future to operate or franchise businesses under a different trademark that will sell goods or services like those you will offer.
Source: Item 12 — Territory (FDD pages 38–39)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc may not alter the Development Area without the franchisee's written agreement. However, Bhc can terminate the Master Franchise Agreement (MFA) under certain conditions. These conditions include failure to meet the Development Schedule, failure to comply with any other terms and conditions of the MFA, attempting to make a transfer or assignment in violation of the MFA, or failing to comply with the terms and conditions of any individual MFA or any other agreement between the franchisee and Bhc or its affiliates.
This means that while Bhc cannot unilaterally change the Development Area, the franchisee's rights to that area are contingent upon fulfilling their obligations under the MFA. Failure to meet these obligations could result in the termination of the agreement, effectively nullifying the franchisee's rights to the Development Area. This is a fairly standard clause in franchise agreements, as franchisors need to ensure that franchisees are actively developing their territories according to the agreed-upon schedule.
Additionally, the FDD states that neither the Development Area granted by the MFA, nor the development area described in the MFA may be altered except if you and Bhc mutually agree. You will maintain rights to your Territory and the Development Area described in the MFA even if the population in those geographic areas increases. This clause provides further assurance that the franchisee's territory is protected from unilateral changes by Bhc, as long as the franchisee adheres to the terms of the MFA.