Does the Franchisor reserve the right to approve potential relocation premises for Bhc Restaurants?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ation, to have the lease agreement
transferred, assigned or novated to Master Franchisee upon a breach of the lease agreement or the expiration or termination of the respective Subfranchise Agreement.
- v. shall, and shall ensure the Subfranchisees shall, not relocate any BHC Restaurant or any part thereof, unless Master Franchisee has meets all of Franchisor's then-current minimum requirements for the premises of new BHC Restaurants, as the same may be amended, replaced or supplemented by Franchisor from time to time, and (ii) notified Franchisor in writing at least one (1) month before such proposed relocation. Franchisor also reserves the right, upon written notice to Master Franchisee, to approve any or all potential relocation premises for the development and operation of BHC Restaurants. To the extent Franchisor exercises its approval right under this paragraph, Master Franchisee shall provide to Franchisor any preliminary document, proposal, plan, report, accounts and other information as Franchisor may require relating to the potential relocation premises.
- vi. shall prepare, amend and annually update a franchise disclosure document ("Subfranchise FDD") to use in offering and selling subfranchises for BHC Restaurants to prospective subfranchisees in accordance with all Franchise Laws (although, upon Master Franchisee's request, Franchisor will provide relevant information about Franchisor and its business to include in the Subfranchise FDD), register Subfranchise FDD with the states, as applicable, properly provide the Subfranchise FDD to prospective subfranchisees and comply with all applicable waiting periods before a prospective subfranchisee pays any consideration to Master Franchisee or Affiliates or signs a binding agreement.
(e) Removal of Subfranchisee
Franchisor may, by written notice to Master Franchisee require Master Franchisee to cease using any Subfranchisee where Franchisor considers that: (a) such Subfranchisee has or is likely to breach its confidentiality obligations with respect to the Confidential Information; (b)such Subfranchisee has infringed the IP Rights or otherwise used the BHC System and/or the IP Rights in a manner or for a purpose other than as permitted under this Agreement and the Subfranchise Agreement; or (c) such Subfranchisee fails to comply in a material respect with any of its obligations under the Subfranchise Agreement.
Master Franchisee shall notify Franchisor promptly after becoming aware of any of the matters referred to in paragraph (e)(i) above.
3.3 Franchise Agreements.
When Master Franchisee opens an additional BHC Restaurant under the Development Schedule, Master Franchisee must enter into Subfranchise Agreement for that additional BHC Restaurant. So long as Master Franchisee is in good standing under this Agreement, Franchisee will continue to have the right to open and operate, including distribute BHC Products and items authorized under this Agreement, receive fees from, as applicable all BHC Restaurants in the Development Area (including both Franchised BHC Restaurant and Subfranchised BHC Restaurants) in accordance with the Development Schedule ("Operating Rights).
3.4 Development Obligations.
- (a) Master Franchisee must comply with all of the terms and conditions of each Franchise Agreement, including the operating requirements specified in each Franchise Agreement.
- (d) Master Franchisee acknowledges that Franchisor may have granted and may in the future operate or grant other licenses and franchises for other retail and wholesale food service businesses outside the Territory. MASTER FRANCHISEE MAY NOT USE FRANCHISOR'S MARKS, OPERATIONAL TECHNIQUES, SERVICE CONCEPTS OR PROPRIETARY INFORMATION IN CONNECTION WITH ANY BUSINESSES OR SERVICES OTHER THAN THE FRANCHISED BUSINESS CONDUCTED BY MASTER FRANCHISEE AT THE BHC RESTAURANT WITHOUT FRANCHISOR'S EXPRESS PRIOR WRITTEN PERMISSION, WHICH PERMISSION, IF GRANTED, WILL BRING SUCH BUSINESSES OR SERVICES WITHIN THE SCOPE OF THE FRANCHISED BUSINESS AND SUBJECT REVENUES THEREFROM TO PAYMENT OF ROYALTY AND MARKETING AND PROMOTION FEES.
- (e) Upon expiration or termination of this Agreement for any reason whatsoever, Master Franchisee shall have no claim whatsoever against Franchisor for compensation for any goodwill associated with the Marks.
3.5 Reserved Rights.
- (a) Nothing contained herein accords Master Franchisee any right, title, or interest in or to the Marks, System, marketing and operational techniques, service concepts, proprietary information or goodwill of Franchisor or associated with the System, except such rights as may be granted hereunder. THIS AGREEMENT GRANTS MASTER FRANCHISEE ONLY THE RIGHT TO OPERATE THE FRANCHISED BUSINESS AT MASTER FRANCHISED BHC RESTAURANT AND NOWHERE ELSE UNLESS FRANCHISOR SPECIFICALLY ALLOWS MASTER FRANCHISEE TO OFFER BHC PRODUCTS ELSEWHERE. ALL OTHER RIGHTS ARE RETAINED BY AND RESERVED TO FRANCHISOR.
- (b) Franchisor reserves the right to develop other systems involving similar or dissimilar services or goods, under dissimilar service marks, trademarks and trade names belonging to Franchisor, without necessarily granting Master Franchisee any rights in those systems. Franchisor reserves all rights to market and sell BHC Products at venues other than BHC Restaurants and through other channels of distribution anywhere, including within Master Franchisee's Territory.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the franchisor does reserve the right to approve potential relocation premises for Bhc restaurants. For Master Franchisees and Sublicensees, relocation requires written notice describing the reasons and details of the new location. The Master Franchisee must provide this notice to Bhc at least 90 days before the desired relocation date, although this may be shorter if prior notice is impractical.
Within 20 business days of receiving the request, Bhc will either approve or disapprove the relocation in writing. If Bhc disapproves, the Master Franchisee can propose an alternative location. Furthermore, Bhc may require the Master Franchisee and landlord to execute a rider to the lease for the new location, granting Bhc an option to assume the lease if the Master Franchisee breaches the lease or the agreement. This rider also allows Bhc to assign the lease to another franchisee and requires the landlord to cooperate with Bhc in de-identifying the restaurant if the agreement terminates and Bhc does not assume the lease.
For franchisees, the process is similar. Franchisees must also request consent to relocate in writing at least 90 days prior to the desired date, unless impractical. Bhc has 20 business days to approve or disapprove the relocation. If disapproved, the franchisee can request approval for an alternative location. Failure to open at the new location after closing the old one may constitute a material default. Bhc may also require a lease rider similar to that for Master Franchisees, ensuring Bhc's ability to take over the lease under certain conditions.
These stipulations ensure that Bhc maintains control over the location of its restaurants, protecting its brand and ensuring operational consistency. Franchisees and Master Franchisees should be aware of these requirements and the potential for Bhc to influence or even control the lease agreements related to their restaurant locations.