What is the dependency for the Franchisor to be responsible for the Lease obligations for the Bhc restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. At or after the time Franchisor assumes Tenant's interests under the Lease, the Franchisor may, at any time, assign such interests or sublet the Premises to a BHC franchisee. Any such assignment shall be subject to the prior written consent of the Landlord, which Landlord shall not unreasonably withhold as it relates to a creditworthy franchisee who otherwise meets Franchisor's then-current standards and requirements for franchisees and agrees to operate the store as a Franchised BHC Restaurant pursuant to a Franchise Agreement with Franchisor. Upon receipt by Landlord of an assumption agreement pursuant to which the assignee agrees to assume the Lease and to observe the terms, conditions, and agreements on the part of Tenant to be performed under the Lease, the Franchisor shall thereupon be released from all liability as tenant under the Lease from and after the date of assignment, without any need of a written acknowledgement of such release by Landlord.
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- Access to Premises During Lease. As provided in the Franchise Agreement, Franchisor shall have the right to access the Premises during continuance of the Lease to ensure compliance by Tenant with its obligations under the Franchise Agreement.
16. Additional Provisions.
- A.
Landlord hereby acknowledges that the provisions of this Addendum to Lease are required pursuant to the Franchise Agreement under which Tenant plans to operate its business and the Tenant would not lease the Premises without this Addendum.
- B.
Landlord further acknowledges that Tenant is not an agent or employee of Franchisor and the Tenant has no authority or power to act for, or to create any liability on behalf of, or to in any way bind Franchisor or any affiliate of Franchisor, and that Landlord has entered into this Addendum to Lease with full understanding that it creates no duties, obligations or liability of or against Franchisor or any affiliate of Franchisor, unless and until the Lease is assigned to, and accepted in writing by, Franchisor.
- C.
All notices to Franchisor required by this Addendum must be in writing and sent by registered or certified mail, postage prepaid, to the following address: BHC USA LLC, 3435 Wilshire Blvd., Suite 460, Los Angeles, CA 90010.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the franchisor's responsibility for lease obligations depends on whether Bhc assumes the tenant's (franchisee's) interests under the lease. If Bhc assumes the lease, it may then assign or sublet the premises to another Bhc franchisee. This assignment is subject to the landlord's prior written consent, which cannot be unreasonably withheld if the new franchisee is creditworthy, meets Bhc's standards, and agrees to operate the restaurant under a Franchise Agreement with Bhc.
Upon the landlord's receipt of an assumption agreement where the new franchisee agrees to adhere to the lease terms, Bhc is released from all liability as the tenant from the assignment date onward, without needing written acknowledgment from the landlord. This process allows Bhc to maintain control over the location and brand standards even if a franchisee defaults or leaves the system.
Furthermore, if Bhc elects to assume the lease, the franchisee remains liable for obligations prior to the assumption date. Bhc is entitled to recover from the franchisee any amounts paid to the landlord to correct the franchisee's defaults, including interest and collection costs. Upon taking possession, Bhc must cure any defaults specified by the landlord within the given timeframes and formally assume the tenant's rights and obligations under the lease. However, Bhc can choose not to be bound by any lease amendments the franchisee made without Bhc's prior written approval.
In the event of lease expiration or termination, the landlord must cooperate with Bhc to regain possession of the premises. If Bhc does not assume the lease, the landlord must allow Bhc to enter the premises to remove signs and other identifying items to protect the Bhc brand and system. This ensures that the location is no longer associated with Bhc after the franchise agreement ends. These measures protect Bhc's brand and provide options for business continuity in case of franchisee issues.