What are the exceptions to the 'abandonment' clause that would prevent Bhc from immediately terminating the franchise agreement?
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 abandons the franchise. Abandonment is defined as failing to operate the franchised Bhc restaurant for five consecutive business days when operation is required under the agreement.
However, there is an exception to this rule. 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. This means that if a natural disaster or similar event prevents the franchisee from operating the restaurant, Bhc cannot immediately terminate the agreement for abandonment.
It is important to note that even a repeated pattern of inactivity for less than five consecutive business days may result in the franchise being deemed abandoned if Bhc believes such inactivity adversely impacts the franchised business. This clause gives Bhc some discretion in determining whether a franchisee has effectively abandoned the business, even if the five-day threshold isn't met. Therefore, franchisees should maintain open communication with Bhc regarding any operational challenges.