What constitutes an 'Assignment by Franchisee' that requires Bhc Franchisor's consent?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ection 6.1 hereof and any other training or orientation programs then required by Franchisor will be satisfactorily completed by other necessary personnel within 30 days after the execution by Franchisee's Assignee of a Franchise Agreement, provided, however, Franchisee's Assignee must also agree to pay for all expenses related to this training, such as travel(at the rate in effect at the time of transfer); and
(vii) upon approval of the transfer, Franchisee pays Franchisor a non-refundable "Transfer Fee" of 100% of Franchisor's then-current Initial Franchise Fee per Franchised BHC Restaurant
(d) Franchisee does not have a right to pledge, encumber, hypothecate or otherwise give any third party a security interest in this Agreement in any manner whatsoever (except that with Franchisor's consent, which will not be unreasonably withheld, Franchisee may pledge a security interest in this Agreement in connection with a Small Business Administration loan), nor sub franchise or otherwise transfer, or attempt to sub franchise or otherwise transfer the Franchised Business, or to transfer or sub franchise a portion but not all of Franchisee's rights hereunder without Franchisor's express prior written consent, which may be withheld for any reason in Franchisor's sole discretion.
(e) Any attempt by Franchisee to assign the Franchise, all (or substantially all) the assets of the Franchised BHC Restaurant, or a controlling interest in Franchisee (if an entity) in violation of this section 12.2 is void and will (i) constitute a material breach of this Agreement, (ii) cause this Agreement (and in Franchisor's sole discretion any or all other agreements between Franchisee and Franchisor, or between Franchisee and Franchisor's affiliates) to be subject to immediate termination without further notice, and (iii) confer no rights or interest whatsoever under this Agreement upon any other party.
(f) Upon Franchisor's consent to any Assignment by Franchisee, Franchisee must bring all accounts with Franchisor current and transfer to Franchisee's assignee all service agreements or contracts signed by customers of the Franchised Business conducted at Franchisee's Franchised BHC Restaurant. Also, Franchisee must (i) execute an agreement among Franchisee, Franchisor and Franchisee's assignee effecting the Assignment by Franchisee, which will include a mutual release between Franchisee and Franchisor and (ii) enter into an assignment of the lease for the Franchised BHC Restaurant premises (including an assignment to the assignee of Franchisee's rights, title and interest to telephone numbers and utilities respecting the Franchised BHC Restaurant).
12.3 Right of First Refusal.
- (a) Except for a Transfer (i) to Franchisee's heirs, personal representatives, or conservators in the case of death or legal incapacity as provided in section 12.4 hereof, Franchisee's right to Transfer Franchisee's entire interest in the Franchise granted by this Agreement under section 12.2 hereof is subject to Franchisor's right of first refusal, which will be exercised in accordance with the terms of this section 12.3.
- (b) Franchisee must deliver to Franchisor a written notice setting forth (i) all of the terms and conditions of any bona fide offer relating to a proposed Assignment by Franchisee, and (ii) all available information concerning Franchisee's Assignee including a detailed summary of how the proposed assignee meets Franchisor's qualifications for a new BHC franchisee, and any other related information requested by Franchisor.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, an 'Assignment by Franchisee' that requires the franchisor's prior written consent includes any attempt by the franchisee to assign the franchise, all (or substantially all) of the assets of the franchised Bhc Restaurant, or a controlling interest in the franchisee (if the franchisee is an entity). Any such attempt made in violation of the outlined section of the agreement is considered void.
This requirement means that a Bhc franchisee cannot transfer their rights or obligations under the franchise agreement, sell the business assets, or transfer a controlling stake in their company without first obtaining approval from Bhc. This provision allows Bhc to maintain control over who operates its franchises and ensures that any new operator meets their standards.
Bhc also requires that prior to any assignment, the franchisee must notify Bhc of their intent to sell, transfer, or assign the franchise, the assets of the Bhc Restaurant, or a controlling or non-controlling interest in the franchisee. The franchisee must provide the proposed transferee's name and address, copies of all agreements related to the sale, assignment, or transfer, and the proposed transferee's application for approval to become the successor franchisee. Bhc will then review the application and notify the franchisee of any additional information needed to complete the transfer application.
Upon Bhc's consent to any assignment by the franchisee, the franchisee must bring all accounts with Bhc current and transfer to the assignee all service agreements or contracts signed by customers of the franchised business. The franchisee must also execute an agreement among the franchisee, Bhc, and the assignee, including a mutual release between the franchisee and Bhc, and enter into an assignment of the lease for the Bhc Restaurant premises.