Who benefits from and is bound by the Bhc arbitration provisions, besides the Franchisor and Master Franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Franchisor and Master Franchisee have entered into a long-term franchise relationship which gives rise to an obligation, subject to and consistent with the terms of this Agreement, to endeavor to make the relationship succeed, considering the overall best interests of the entire BHC system, as contemplated by this Agreement. To that end, Master Franchisee and Franchisor acknowledge that Master Franchisee and Franchisor need to attempt to resolve disagreements or disputes before such disagreements or disputes negatively impact the relationship. Good faith communications between Master Franchisee and Franchisor are important aspects of that obligation. The parties hereby pledge and agree that they will first attempt to resolve any dispute, claim or controversy arising out of or relating to this Agreement or any alleged breach hereof, including any claim that this Agreement or any part hereof is invalid, illegal or otherwise voidable or void (collectively, "Dispute") by first having Franchisor's executive officers and Master Franchisee's Principal Equity Operators meet in person within five business days after a party notifies the other party that a Dispute has arisen at Franchisor's principal executive office (without their respective legal counsel) to conduct a good faith discussion and negotiation of the issues with the express intention of arriving at a settlement ("Settlement Conference"). Franchisor may proceed to terminate this Agreement in either of the following two situations without a settlement meeting or mediation proceeding: (i) if there is any breach of this Agreement by Master Franchisee that may result in an immediate termination of this Agreement pursuant to section 13.2 above, or (ii) if Master Franchisee fails to pay any sums due Franchisor under this Agreement which may result in termination of this Agreement pursuant to section 13.3 above. Also, if a party refuses to participate in the Settlement Conference or mediation within the respective time frames set forth in this section 14.1, the other party may immediately commence an arbitration proceeding pursuant to section 14.2 below.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
Based on the 2025 Bhc Franchise Disclosure Document, the initial steps to resolve a dispute involve good faith communication between Bhc's executive officers and the Master Franchisee's Principal Equity Operators. They are expected to meet in person to discuss and negotiate a settlement. This applies to any dispute arising from the agreement, including claims of breach or invalidity.
Bhc can proceed to terminate the agreement without a settlement meeting or mediation if the Master Franchisee breaches the agreement resulting in immediate termination, or if the Master Franchisee fails to pay sums due to Bhc, potentially leading to termination. If either party refuses to participate in the settlement conference or mediation within the specified time frames, the other party can immediately start an arbitration proceeding.
The FDD states that the Master Franchisee and Bhc have a long-term franchise relationship that requires them to try to resolve disagreements before they negatively impact the relationship. This involves good faith communications between the Master Franchisee and Bhc. If a party refuses to participate in the Settlement Conference or mediation within the respective time frames, the other party may immediately commence an arbitration proceeding.