What is the exception to the Bhc franchise termination policy if the franchisee fails to operate the restaurant for five consecutive business days?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) Franchisee Abandons the Franchise by failing to operate the Franchised BHC Restaurant for five consecutive business days during which Franchisee is required to operate the business under the terms of this Agreement, or any shorter period after which it is not unreasonable under the facts and circumstances for Franchisor to conclude that Franchisee does not intend to continue to operate the Franchise, unless such failure to operate is due to fire, flood, earthquake or other similar causes beyond Franchisee's control;
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc can immediately terminate the franchise agreement if the franchisee fails to operate the restaurant for five consecutive business days. However, there is an exception to this policy. Bhc will not deem the franchise abandoned if the failure to operate is due to fire, flood, earthquake, or other similar causes beyond the franchisee's control.
To qualify for this exception, the franchisee must notify Bhc of the closure within five business days of the event and acknowledge in writing that the inactivity is due to one of these causes. Furthermore, the franchisee must re-establish the franchised business and be fully operational within 180 days after the initial event, unless Bhc permits a longer period.
This clause protects franchisees from immediate termination due to circumstances outside their control, providing a grace period to recover from unforeseen events. However, it also places the onus on the franchisee to promptly communicate with Bhc and take swift action to resume operations to avoid termination.