Following the death of a Bhc franchisee, what is the maximum timeframe allowed for the transfer of the franchise interest?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
12.4 Transfers upon the Death or Incapacity of an Individual Franchisee or Majority Equity Owner.
(a) Notwithstanding the foregoing, in the event of Franchisee's death or legal incapacity if Franchisee is an individual, or the death or legal incapacity of a Principal Equity Operator of Franchisee owning a majority equity interest ("Majority Equity Owner") in Franchisee (if an entity), the transfer of Franchisee's or the deceased Majority Equity Owner's interest in this Agreement to his or her spouse, parent or adult children, will not be deemed Assignment by Franchisee, provided a qualified and trained General Manager remains employed at the Franchised BHC Restaurant or another responsible management employee or agent of Franchisee satisfactorily trained by Franchisor will be responsible for the Franchised Business.
(b) In the event of an individual 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 Franchised BHC Restaurant on 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 Franchisee's Franchised BHC Restaurant, and 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 franchisee or a majority equity owner, the interest in the franchise agreement or the equity interest in the franchise entity must be transferred as soon as practicable. However, the transfer must occur no more than 270 days after the date of death. This transfer needs to be in accordance with the deceased person's will or, if there is no will, according to the laws governing the distribution of the person's estate. Adequate provisions must also be in place for the management of the franchised business during this period.
If Bhc determines that there is no imminent sale to a qualified successor or no heir capable of operating the franchise, Bhc has the option, but not the obligation, to immediately commence operating the franchised restaurant on behalf of the franchisee. This operation can last for up to 90 days and can be renewed as Bhc deems necessary, potentially extending up to one year. Bhc will periodically discuss the status with the heirs of the deceased during this time.
Bhc can also place an interim manager at the franchised restaurant. In this case, the franchisee's estate is responsible for covering the manager's salary, transportation, lodging, related living expenses, and a management administration fee of 15%. This ensures that the restaurant continues to operate and maintain standards while the transfer of ownership is being finalized. This arrangement provides a safety net for both Bhc and the franchisee's heirs, ensuring business continuity and proper management during the transition period.