What are the exceptions to the abandonment clause for a Bhc franchise, regarding failure to operate the business?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
conditions contained in this Agreement, and other good and valuable consideration, Master Franchisee and Franchisor hereby agree as follows.
1. DEFINITIONS
"Abandoned" means cessation of operation of the Franchised Business for a period of five consecutive business days, without Franchisor's prior written consent. A repeated pattern of inactivity at Master Franchised BHC Restaurant for periods of less than five consecutive business days may result in the Franchised Business being deemed Abandoned by Master Franchisee if in Franchisor's judgment such inactivity adversely impacts the Franchised Business. However, Master Franchised BHC Restaurant will not be deemed Abandoned if the inactivity is due to natural disasters or other matters reasonably beyond Master Franchisee's control, provided that Master Franchisee gives Franchisor notice of any such closure within five business days after the initial occurrence of the event resulting in such inactivity, and Master Franchisee acknowledges in writing that such inactivity is due to one of the foregoing causes, and provided further that Master Franchisee re-establish the Franchised Business and be fully operational within 180 days after the initial occurrence of the event resulting in such inactivity, or such longer period as Franchisor may permit.
- "Affiliate" means in relation to a party, any Person Controlling, Controlled by or under common Control with such party, either directly or indirectly through one or more intermediaries.
- "Franchised BHC Restaurant" means a BHC Restaurant that is or will be established and operated by an Affiliate of Master Franchisee.
- "Agreement" means this Multi-Unit Master Franchise Agreement and all instruments amending this Multi-Unit Master Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a franchisee's BHC Restaurant will not be deemed abandoned if the inactivity is due to natural disasters or other matters reasonably beyond the franchisee's control. However, the franchisee must provide the Franchisor notice of such closure within five business days after the event. The franchisee must also acknowledge in writing that the inactivity is due to one of the aforementioned causes.
Furthermore, to avoid being considered as having abandoned the franchise, the franchisee must re-establish the Franchised Business and be fully operational within 180 days after the initial occurrence of the event resulting in such inactivity. This timeline may be extended at the Franchisor's discretion.
It is important to note that if a franchisee fails to operate the Franchised BHC Restaurant for five consecutive business days, during which the franchisee is required to operate the business under the terms of the Agreement, Bhc has the right to immediately terminate the agreement. This can also occur after any shorter period if it is not unreasonable for Bhc to conclude that the franchisee does not intend to continue to operate the Franchise.