For Bhc franchises, is a Master Franchisee or Principal Equity Operator prohibited from conducting activities that constitute a money laundering crime?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Neither Master Franchisee nor any Principal Equity Operator conducts any activity, or has failed to conduct any activity, if such action or inaction constitutes a money laundering crime, including any money laundering crime prohibited under any applicable Anti-Terror Legislation.
- (c) Neither Master Franchisee nor any Principal Equity Operator nor any employee of either is named as a "Specially Designated National" or "Blocked Person" as designated by the U.S. Department of the Treasury's Office of Foreign Assets Control and published at www.treas.gov/offices/enforcement/ofac/sdn/. Master Franchisee acknowledges that Master Franchisee is not directly or indirectly owned or controlled by the government of any country that is subject to an embargo imposed by the United States of America, nor does Master Franchisee or any Principal Equity Operator act directly or indirectly on behalf of the government of any country that is subject to an embargo imposed by the United States of America. Master Franchisee agrees that Master Franchisee will notify Franchisor in writing immediately of the occurrence of any event that renders the foregoing representations and warranties of this section 16.12 incorrect.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Master Franchisees and Principal Equity Operators are prohibited from conducting activities that constitute a money laundering crime. Specifically, neither the Master Franchisee nor any Principal Equity Operator can conduct any activity, or fail to conduct any activity, if such action or inaction constitutes a money laundering crime. This includes any money laundering crime prohibited under any applicable Anti-Terror Legislation. This requirement aims to ensure that all Bhc franchise operations adhere to legal and ethical standards regarding financial transactions.
Furthermore, neither the Master Franchisee, any Principal Equity Operator, nor any employee of either can be named as a "Specially Designated National" or "Blocked Person" by the U.S. Department of the Treasury's Office of Foreign Assets Control. The Master Franchisee must also acknowledge that they are not directly or indirectly owned or controlled by the government of any country subject to a U.S. embargo, nor do they act on behalf of such a government.
The Master Franchisee is obligated to notify Bhc immediately in writing if any event occurs that renders these representations and warranties incorrect. This provision underscores the importance of compliance with anti-money laundering and anti-terrorism financing laws, reflecting Bhc's commitment to maintaining a legally sound and ethical franchise system. Prospective franchisees should understand these obligations and ensure their business practices align with these requirements to avoid potential legal and financial repercussions.