Does the Bhc franchise agreement specify the reasons for which an assignment can be disapproved?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
If the proposed sale, assignment, or transfer is disapproved, Franchisor shall include in the notice of disapproval a statement setting forth the reasons for the disapproval.
Franchisor may impose, among other things, the following conditions precedent to Franchisor's consent to any such Assignment by Master Franchisee (these conditions are consistently applied to similarly situated Master Franchisees operating under the Franchise brand):
(i) the assignee of Master Franchisee ("Master Franchisee's Assignee") must complete Franchisor's application for a franchise, and in connection therewith, Master Franchisee and Master Franchisee's Assignee must fully disclose in writing all terms and conditions of the Assignment by Master Franchisee;
(ii) Master Franchisee's Assignee and the Principal Equity Operators of Master Franchisee's Assignee demonstrate that it or they have the skills, qualifications, moral and ethical reputation, and economic resources necessary, in Franchisor's sole judgment, to conduct the business contemplated by this Agreement;
(iii) Master Franchisee's Assignee and each Principal Equity Operator of Master Franchisee's Assignee expressly assume in writing for Franchisor's benefit all of Master Franchisee's obligations under this Agreement;
(iv) Master Franchisee's Assignee executes the then current form of Franchise Agreement being used by Franchisor for the remainder of the term of this Agreement or, in Franchisor's sole discretion, for the initial term of the then current form of Franchise Agreement;
(v) Master Franchisee must have complied fully as of the date of any such Assignment by Master Franchisee with all of Master Franchisee's material obligations to Franchisor, whether under this Agreement or any other agreement, arrangement or understanding with Franchisor;
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if Bhc disapproves a proposed sale, assignment, or transfer, they must provide a statement outlining the reasons for the disapproval. For Master Franchisees, Bhc may impose conditions before consenting to an assignment. These conditions include the assignee completing Bhc's franchise application and fully disclosing the terms of the assignment.
Additionally, the assignee and their Principal Equity Operators must demonstrate the skills, qualifications, ethical reputation, and economic resources necessary to operate the business, as determined by Bhc. The assignee must also assume all of the Master Franchisee's obligations under the agreement in writing and execute Bhc's current form of Franchise Agreement. The Master Franchisee must also be in full compliance with all material obligations to Bhc at the time of the assignment.
For franchisees, Bhc's consent to an assignment can be withheld for any reason at Bhc's sole discretion. Any attempt to assign the franchise in violation of the agreement is void and constitutes a material breach, potentially leading to immediate termination of the agreement. Upon Bhc's consent to an assignment, the franchisee must bring all accounts with Bhc current and transfer all service agreements to the assignee.