Besides the franchisee, to whom else does Article 11 apply within the Bhc franchise?

According to Bhc's 2025 Franchise Disclosure Document, Article 11, which pertains to non-competition covenants, extends beyond just the franchisee. It also applies to all Principal Equity Operators and the franchisee's General Manager. This means that these individuals are also bound by the restrictions and obligations outlined in Article 11, particularly those related to non-competition during and after the franchise term.

This provision is significant for prospective Bhc franchisees because it highlights that the non-competition obligations are not limited to the individual or entity that signs the franchise agreement. It encompasses those who have a substantial equity stake in the franchise (Principal Equity Operators) and the person responsible for the day-to-day management of the Bhc restaurant (the General Manager). This is a common practice in franchising to ensure that key individuals who have knowledge of the franchisor's confidential information and operational methods are also committed to not competing with the franchise system.

The inclusion of these parties ensures that Bhc can protect its business interests and proprietary information from being used to benefit competing businesses. Franchisees should ensure that their Principal Equity Operators and General Manager are fully aware of these obligations and understand the implications of violating the non-competition covenants. This may involve having these individuals sign separate agreements or acknowledgments to confirm their understanding and acceptance of these terms. Franchisees should carefully review Article 11 and Exhibit 4 (the Confidentiality and Non-Competition Agreement) with their legal counsel to fully understand the scope of these restrictions and their potential impact.