After assigning the agreement to an Affiliated Entity, is the Bhc Master Franchisee allowed to maintain direct ownership and operation of Bhc Restaurants they developed?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Any assignment and transfer by Master Franchisee of the rights, duties and obligations under this Agreement to an Affiliated Entity must be evidenced by a written instrument, in form reasonably satisfactory to Franchisor, under the terms of which said business entity expressly assumes all of Master Franchisee's rights, duties, and obligations hereunder, whether accrued at the time of such assignment or arising thereafter, and the assignee agrees to be bound by all the terms and provisions of this Agreement to the same extent and in the same manner as Master Franchisee is. A copy of said instrument, executed by both Master Franchisee and said business entity must be delivered to Franchisor before the effective date of the transfer. Master Franchisee will not be able to maintain direct ownership and operation of the BHC Restaurants which Master Franchisee (or its Affiliated Entities) has developed after such assignment.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee is not able to maintain direct ownership and operation of Bhc Restaurants after assigning the agreement to an Affiliated Entity. The Master Franchisee can assign the agreement to an entity that is organized to operate as a developer of Bhc Restaurants and is entirely owned by the Master Franchisee, known as an Affiliated Entity. This assignment requires at least 30 days prior written notice to Bhc, and Bhc's written consent.
Any such assignment must be documented in a written instrument that is satisfactory to Bhc. The Affiliated Entity must expressly assume all of the Master Franchisee's rights, duties, and obligations under the agreement. This includes all obligations, whether they existed at the time of assignment or arise afterward. The Affiliated Entity must agree to be bound by all terms and provisions of the agreement to the same extent as the Master Franchisee.
Before the transfer takes effect, a copy of the executed assignment instrument must be delivered to Bhc. After the assignment, the Master Franchisee cannot directly own or operate the Bhc Restaurants that they or their Affiliated Entities developed. This ensures that the Affiliated Entity takes full responsibility for the operation and development of the restaurants, preventing the original Master Franchisee from maintaining control after the transfer.