Can a Bhc franchisee assign their interest in the agreement without Bhc's prior written consent?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
hts and privileges hereunder ("Assignment by Franchisor") to any other person, firm, or corporation ("Franchisor's Assignee"). Upon the effective date of the Assignment by Franchisor and thereafter, Franchisor will be relieved of all obligations or liabilities under this Agreement.
12.2 Assignment by Master Franchisee.
(a) This Agreement is being executed by Franchisor in reliance upon and in consideration of the unique skills and qualifications of Master Franchisee and the Principal Equity Operators and the trust and confidence reposed in them by Franchisor. Therefore, neither Master Franchisee's interest in this Agreement and the Franchise granted hereunder, nor all or substantially all of the assets of the BHC Restaurant, nor a controlling or non-controlling interest in Master Franchisee (if an entity), may be assigned, transferred, shared or divided, voluntarily or involuntarily, in whole or in part, by operation of law or otherwise, in any manner (collectively, "Assignment by Master Franchisee"), without Franchisor's prior written consent and, except for any transfer of a non-controlling interest, subject to Franchisor's right of first refusal provided for in section 12.3 hereof, and transfer to an Affiliated Entity provided for in section 12.6 hereof. Franchisor's consent to a specific Assignment by Master Franchisee is not cumulative and will not apply to any subsequent assignments, in respect of each of which Master Franchisee must comply with this section 12.2.
(b) Prior to any Assignment by Master Franchisee, Master Franchisee must notify Franchisor of Master Franchisee's intent to sell, transfer or assign the Franchise, all (or substantially all) the assets of the BHC Restaurant, or a controlling or non- controlling interest in Master Franchisee (if an entity). The notice must be in writing, delivered to Franchisor in accordance with section 16.1 hereof and include the following:
(i) the proposed transferee's name and address;
(ii) a copy of all agreements related to the sale, assignment, or transfer of the Franchise, the assets of the BHC Restaurant, or the controlling interest in Master Franchisee (if an entity); and
(iii) the proposed transferee's application for approval to become the successor Master Franchisee (this application must include all forms, financial disclosures and related information generally used by Franchisor when interviewing prospective new Master Franchisees, if Franchisor makes those forms available to Master Franchisee. If the forms are not readily available, Master Franchisee must request that Franchisor deliver the forms to Master Franchisee by business courier in accordance with section 16.1 hereof within 15 calendar days).
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a franchisee cannot assign their interest in the Franchise Agreement without prior written consent from Bhc. Bhc executes the agreement based on the franchisee's unique skills, qualifications, and the trust they place in them. Therefore, any assignment, transfer, sharing, or division of the franchisee's interest, the restaurant's assets, or a controlling interest in the franchisee entity requires Bhc's prior written consent. This applies to voluntary, involuntary, or any other form of assignment.
Bhc's consent to one assignment does not mean they approve future assignments; the franchisee must seek approval for each separate assignment. If a franchisee attempts to assign their franchise in violation of this requirement, the action is considered void. This constitutes a material breach of the Franchise Agreement, potentially leading to immediate termination of the agreement and any other agreements between the franchisee and Bhc. The unauthorized assignment would also not confer any rights or interests to another party.
In the event that Bhc consents to an assignment, the franchisee must ensure all accounts with Bhc are current. Additionally, the franchisee must transfer all service agreements or contracts signed by customers to the assignee. The franchisee, Bhc, and the assignee must execute an agreement that formalizes the assignment and includes a mutual release between the franchisee and Bhc. The franchisee must also assign the lease for the restaurant premises, including all rights, titles, and interests related to telephone numbers and utilities, to the assignee.