What constitutes abandonment of the Bhc Franchise, leading to immediate termination?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
exercised in its sole discretion, to choose alternative remedies to its right to terminate the entire Agreement.
- (d) Notwithstanding anything contained herein to the contrary, in those circumstances under which Franchisor has the right to terminate this Agreement, Franchisor also has the right to exercise any and all remedies available to it at law or in equity, including specific performance and damages (including
liquidated and punitive damages). All rights and remedies provided herein are in addition to and not in substitution of all other rights and remedies available to a party at law or in equity.
13.2 Immediate Termination.
- (a) Franchisor has the right to immediately terminate this Agreement upon notice to Franchisee without an opportunity to cure if:
- (i) Franchisee admits its inability to pay its debts as they come due, or Franchisee or the business to which the Franchise relates (A) has been the subject of an order for relief in bankruptcy, (B) is judicially determined to be insolvent or (C) has all or a substantial part of its assets assigned to or for the benefit of any creditor;
- (ii) Franchisee Abandons the Franchise by failing to operate the Franchised BHC Restaurant for five consecutive business days during which Franchisee is required to operate the business under the terms of this Agreement, or any shorter period after which it is not unreasonable under the facts and circumstances for Franchisor to conclude that Franchisee does not intend to continue to operate the Franchise, unless such failure to operate is due to fire, flood, earthquake or other similar causes beyond Franchisee's control;
- (iii) Franchisor and Franchisee agree in writing to terminate the Franchise;
- (iv) Franchisee makes any material misrepresentations relating to the acquisition of the Franchise or Franchisee engages in conduct that reflects materially and unfavorably upon the operation and reputation of the Franchised Business or the System;
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, abandonment of the franchise occurs when the franchisee ceases operation of the franchised business for five consecutive business days without the franchisor's prior written consent. A repeated pattern of inactivity for periods less than five consecutive business days may also lead to the business being deemed abandoned if Bhc believes the inactivity adversely impacts the franchised business.
However, the franchise will not be deemed abandoned if the inactivity results from natural disasters or other matters reasonably beyond the franchisee's control. In such cases, the franchisee must provide Bhc with notice of the closure within five business days after the event and acknowledge in writing that the inactivity is due to such causes. Furthermore, the franchisee must re-establish the franchised business and be fully operational within 180 days after the initial event, or within a longer period if Bhc permits.
If a franchisee is found to have abandoned the franchise, Bhc has the right to immediately terminate the franchise agreement upon notice, without providing an opportunity to cure the breach. This means the franchisee would lose their rights to operate the Bhc restaurant and would likely face additional penalties as outlined in the franchise agreement.