Does a Bhc franchisee have to indemnify Bhc for losses resulting from a breach of Article 11 by the franchisee's General Manager?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Franchisee agrees to indemnify Franchisor and hold Franchisor harmless from and against all Losses which Franchisor may sustain as a result of any breach of this Article 11 by Franchisee, any Principal Equity Operator, or Franchisee's General Manager.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a franchisee is required to indemnify Bhc for losses resulting from a breach of Article 11 by the franchisee's General Manager. This obligation is part of the general provisions regarding non-competition covenants outlined in the franchise agreement.
Specifically, the franchisee agrees to protect Bhc from any losses the company sustains due to a breach of Article 11, not only by the franchisee themselves but also by any Principal Equity Operator or the franchisee's General Manager. This means that if the General Manager violates the non-competition terms, the franchisee is financially responsible for any resulting damages to Bhc.
This requirement underscores the importance of ensuring that all individuals associated with the franchise, particularly those in key management positions like the General Manager, fully understand and adhere to the non-competition covenants. Franchisees should implement thorough training and monitoring programs to mitigate the risk of breaches by their employees, as the financial consequences could be significant.