What is the document called that outlines the agreement between the Landlord and Tenant regarding the Bhc restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) Unless otherwise agreed to in writing by Franchisee and Franchisor, Franchisee has the sole responsibility for locating, securing, and obtaining suitable premises for Franchisee's Franchised BHC Restaurant.
Franchisee and Franchisee's landlord will be required by Franchisor to execute an addendum to Franchisee's lease (or other written agreement or written understanding incorporated in, or attached as a rider to, the lease) that (i) grants Franchisor an option to assume Franchisee's position as lessee under the lease for the Franchised BHC Restaurant premises if Franchisee is in material breach of either the lease for the Franchised BHC Restaurant premises (including an obligation of the landlord to notify Franchisor if Franchisee is in such breach) or this Agreement, (ii) grants Franchisor the right to assign the lease to a bona fide franchisee of the System after assuming the lease, and (iii) requires the landlord to fully cooperate with Franchisor in completing de-identification of the Franchised BHC Restaurant if this Agreement is terminated or expires without being renewed and Franchisor does not exercise its option to assume the lease for the Franchised BHC Restaurant premises.
The Addendum to Lease is attached as Exhibit 5.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the agreement between the Landlord and Tenant is outlined in a lease, which requires an addendum. Franchisees are generally responsible for securing a suitable location for their Bhc restaurant.
The FDD specifies that Bhc requires the franchisee and the landlord to execute an addendum to the lease. This addendum grants Bhc an option to assume the franchisee's position as lessee if the franchisee materially breaches the lease or the Franchise Agreement. It also allows Bhc to assign the lease to another franchisee after assuming it. Furthermore, the addendum requires the landlord to cooperate with Bhc in de-identifying the restaurant if the Franchise Agreement terminates or expires and Bhc does not exercise its option to assume the lease.
The document mentions that the Addendum to Lease is attached as Exhibit 5, suggesting that prospective franchisees can review a sample addendum to understand its terms and conditions. This addendum is a critical component of the leasing process, ensuring that Bhc has certain rights and protections related to the restaurant premises.
This requirement is fairly common in franchising, as it allows the franchisor to maintain control over the location and ensure business continuity in case of franchisee default or termination. Prospective Bhc franchisees should carefully review Exhibit 5 and discuss the implications of the Addendum to Lease with their landlord and legal counsel to fully understand their obligations and rights.