What is the definition of 'Force Majeure' in the context of Bhc's operating requirements?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
"Force Majeure." means a natural disaster (such as tornado, earthquake, hurricane, flood, fire or other natural catastrophe); strike, lockout or other industrial disturbance; war, terrorist act, riot, or other civil disturbance; epidemic; pandemic (e.g., COVID-19), or other similar force which Franchisee could not by the exercise of reasonable diligence have avoided; provided however, neither an act or failure to act by any federal, state, county, municipal and local governmental and quasi-governmental agency, commission or authority, nor the performance, non- performance or exercise of rights under any agreement with Franchisee by any lender, landlord, or other person will be a Force Majeure, except to the extent such act, failure to act, performance, non-performance or exercise of rights results from an act which is otherwise a Force Majeure. To avoid any potential misunderstanding, Franchisee's financial inability to perform or insolvency will not be a Force Majeure.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a 'Force Majeure' event is defined as an extraordinary circumstance that prevents a franchisee from fulfilling their contractual obligations. These events include natural disasters such as tornadoes, earthquakes, hurricanes, floods, fires, and other natural catastrophes. It also encompasses strikes, lockouts, industrial disturbances, war, terrorist acts, riots, civil disturbances, epidemics, and pandemics like COVID-19. The event must be one that the franchisee could not have avoided by exercising reasonable diligence.
However, the definition explicitly excludes certain situations. Actions or failures to act by governmental agencies (federal, state, county, municipal, and local) are not considered Force Majeure events. Similarly, the performance, non-performance, or exercise of rights by lenders, landlords, or other parties under agreements with the franchisee does not qualify, unless these actions directly result from an event that would otherwise be considered a Force Majeure.
Furthermore, the FDD emphasizes that a franchisee's financial inability to perform or insolvency will not be considered a Force Majeure event. This clarification is crucial, as it means that financial difficulties cannot be used as a justification for non-compliance with the franchise agreement. This definition is important because it dictates when Bhc franchisees may be excused from certain operational requirements due to circumstances beyond their control, but also sets clear boundaries to prevent misuse of the clause.