How does Bhc define 'Affiliates' in the context of prohibited relationships for Prospective Franchisees?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
No Prospective Franchisee and his/her/its Affiliates (as that term is defined below) had or has any relationship, affiliation, or ownership interest, directly or indirectly, with BHC USA or its Affiliates ("Prohibited Persons"). "Affiliates" mean a party's respective present and former, direct and indirect, parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses (for individuals), including any other person directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such person. "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the term 'Affiliates' is specifically defined in relation to prohibited relationships for prospective franchisees. Bhc requires that prospective franchisees and their affiliates have no prior or current relationship, affiliation, or ownership interest with Bhc USA or its affiliates, termed "Prohibited Persons."
Bhc defines 'Affiliates' broadly to include a party's present and former direct and indirect parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses (for individuals). The definition extends to any person or entity that directly or indirectly controls, is controlled by, or is under common control with the party. 'Control' is defined as the power to direct the management and policies of a person, whether through ownership of voting securities, by contract, or otherwise.
This definition is important for prospective franchisees because it clarifies the scope of relationships that could disqualify them from being granted a franchise. It ensures that there are no conflicts of interest or undue influence from parties connected to Bhc. Prospective franchisees must disclose any such relationships to Bhc to avoid potential issues during the application process. This requirement is designed to maintain the integrity and impartiality of the franchise award process.