Besides termination, what other options does Bhc Franchisor have when the Franchisee breaches the Franchise Agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
under which Franchisor has the right to terminate this Agreement, Franchisor also has the right, to be exercised in its sole discretion, to grant to Franchisee in writing only, in lieu of termination of this Agreement, an extended period of time to cure the breach which gave rise to Franchisor's right to terminate, but in no event may such extended cure period exceed six months from the last day of the cure period otherwise applicable to such breach. Franchisee acknowledges that Franchisor's election to grant an extended cure period to Franchisee will not operate as a waiver of any of Franchisor's rights hereunder.
13.7 Franchisor's Right to Cure Franchisee's Defaults.
- (a) In addition to all other remedies herein granted, if Franchisee breaches in the performance of any of Franchisee's obligations or breaches any term or condition of this Agreement or any related agreement involving third parties, Franchisor may, at Franchisor's election, immediately or at any time thereafter, without waiving any claim for breach hereunder and without notice to Franchisee, cure the breach for Franchisee's account and on Franchisee's behalf, and all costs or expenses including attorney's fees incurred by Franchisor on account thereof are due and payable by Franchisee to Franchisor on demand.
- (b) If Franchisor terminates this Agreement for cause, Franchisor has the right (but not the obligation) to assume the lease for the Franchised BHC Restaurant premises and to purchase Franchisee's assets pursuant to section 15.2(d) below.
13.8 Waiver and Delay.
No waiver by Franchisor of any breach or series of breaches in performance by Franchisee and no failure, refusal or neglect of Franchisor either to exercise any right, power or option given to Franchisor hereunder or to insist upon strict compliance with or performance of Franchisee's obligations under this Agreement or the Operations Manual, constitutes a waiver of the provisions of this Agreement or the Operations Manual with respect to any subsequent breach thereof or a waiver by Franchisor of its right at any time thereafter to require exact and strict compliance with the provisions thereof.
13.9 Collection Costs.
Franchisor is entitled to reimbursement from Franchisee upon Franchisor's demand of all costs Franchisor has incurred (including reasonable attorneys' fees and investigator's fees) to enforce Franchisor's rights under this Agreement, including actions to collect any amounts due and delinquent hereunder.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, besides termination, Bhc has the right to cure the franchisee's defaults. If a franchisee fails to meet their obligations or violates any terms of the agreement, Bhc can step in to correct the breach on the franchisee's behalf without giving prior notice. The franchisee is then responsible for covering all costs and expenses Bhc incurs, including attorney's fees, payable to Bhc upon demand. This allows Bhc to ensure compliance and protect its brand standards even if a franchisee is underperforming or non-compliant.
Additionally, Bhc can seek reimbursement from the franchisee for all costs incurred to enforce its rights under the franchise agreement. This includes reasonable attorney's fees and investigator's fees for actions taken to collect any amounts due. This provision ensures that Bhc can pursue legal remedies to protect its interests without bearing the full financial burden of enforcement.
Furthermore, Bhc's decision to continue business relations with a franchisee after a breach does not constitute a waiver of its rights. Bhc can still demand strict compliance with the agreement's provisions and the operations manual at any time, even if it has previously overlooked a breach. This protects Bhc from inadvertently relinquishing its rights due to leniency or delay in enforcing the agreement. Bhc also has the right to regularly inspect the franchisee's restaurant and any other site where the franchisee conducts business.