In the event of the death of a Bhc Master Franchisee, what is the maximum timeframe allowed for the transfer of the interest in the Agreement or equity interest?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) In the event of an individual Master Franchisee's death or the death of a Majority Equity Owner, such person's interest in this Agreement or its equity interest in the franchise entity must Transfer as soon as practicable (but not more than 270 days) after the date of death in accordance with such person's will or, if such person dies without a will, in accordance with laws of intestacy governing the distribution of such person's estate, provided that adequate provision is made for the management of the Franchised Business. If Franchisor determines (i) there is no imminent sale to a qualified successor or (ii) there is no heir or other Principal Equity Operator capable of operating the Franchise, Franchisor may
(but is not obligated to) immediately commence operating the BHC Restaurant on Master Franchisee's behalf for a period of up to 90 days, renewable as Franchisor deems necessary for up to one year and Franchisor will periodically discuss the status with the heirs of the decedent. Franchisor can place an interim manager Master Franchised BHC Restaurant, and Master Franchisee must pay Franchisor the manager's salary, transportation, lodging and related living expenses, and our management administration fee of 15%.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, in the event of the death of an individual Master Franchisee or a Majority Equity Owner, the interest in the Agreement or equity interest must be transferred as soon as practicable, but no more than 270 days after the date of death. This transfer must align with the deceased person's will or, if there is no will, with the laws governing the distribution of the estate. Adequate provisions must also be in place for the management of the franchised business during this period.
Bhc may step in to operate the restaurant on behalf of the Master Franchisee's heirs for up to 90 days, with possible renewals up to one year, if there is no imminent sale to a qualified successor or no capable heir to operate the franchise. During this time, Bhc will discuss the status with the heirs. Bhc can also place an interim manager at the restaurant, with the Master Franchisee responsible for covering the manager's salary, transportation, lodging, living expenses, and a 15% management administration fee.
This clause ensures business continuity and protects Bhc's interests while allowing for the orderly transfer of the franchise to the franchisee's heirs. The 270-day timeframe provides a reasonable period for legal and administrative processes following the death of the franchisee. The option for Bhc to manage the restaurant temporarily mitigates potential disruptions and maintains the brand's operational standards.