Following termination of the Bhc Master Franchise Agreement, is the franchisee's immediate family also restricted from participating in a Competitive Business?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
e created and granted by the Franchise Agreement.
- (3) While the Master Franchise Agreement is in effect, neither the undersigned, nor any member of his or her immediate family, shall engage in, or participate as an owner, officer, partner, director, agent, employee, shareholder or otherwise in any other Competitive Business without having first obtained the Franchisor's written consent. For the purposes of this Agreement,
- (4) The undersigned has acquired from the Franchisor confidential information regarding Franchisor's trade secrets and franchised methods which, in the event of a termination of the Franchise Agreement, could be used to injure the Franchisor. As a result, neither the undersigned, nor any member of his or her immediate family, shall, for a period of two (2) years from the date of termination, transfer or expiration of the Master Franchise Agreement, without having first obtained the Franchisor's written consent, engage in or participate as an owner, officer, partner, director, agent, employee, shareholder or otherwise in any Competitive Business which is located or operating, as of the date of such termination,
transfer or expiration, within a 25-mile radius of the Master Franchisee's former Franchised Location as defined in the Master Franchise Agreement, or within a 10-mile radius of any other franchised or company-owned BHC Restaurant, unless such right is granted pursuant to a separate agreement with the Franchisor.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, both the franchisee and their immediate family are restricted from engaging in a Competitive Business for a period of two years after the termination or expiration of the Master Franchise Agreement. This restriction applies within a 25-mile radius of the franchisee's former franchised location or within a 10-mile radius of any other franchised or company-owned Bhc restaurant. This restriction is in place unless the franchisee obtains written consent from Bhc or has a separate agreement with Bhc that grants them such rights.
The term "Competitive Business" is defined as any business deriving more than 10% of its gross sales from the sale, processing, or manufacturing of fried chicken, sandwich, and other products offered in Bhc Restaurants, which constitute 10% or more of the gross retail sales of any Bhc Restaurant. This definition is important for franchisees to understand, as it clarifies the scope of activities that are prohibited under the non-compete clause.
This non-compete obligation is designed to protect Bhc's confidential information, trade secrets, and franchised methods, which the franchisee gains access to during the term of the agreement. The restriction aims to prevent the franchisee from using this knowledge to compete unfairly with Bhc after the agreement ends. Prospective franchisees should carefully consider the implications of this non-compete clause, especially if they have family members who may be interested in entering a similar business. It is advisable to seek legal counsel to fully understand the scope and enforceability of these restrictions in their specific jurisdiction.