What are the franchisor's options after receiving notice of a proposed Bhc franchise assignment?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
12.3 Right of First Refusal.
- (a) Except for a Transfer (i) to Franchisee's heirs, personal representatives, or conservators in the case of death or legal incapacity as provided in section 12.4 hereof, Franchisee's right to Transfer Franchisee's entire interest in the Franchise granted by this Agreement under section 12.2 hereof is subject to Franchisor's right of first refusal, which will be exercised in accordance with the terms of this section 12.3.
- (b) Franchisee must deliver to Franchisor a written notice setting forth (i) all of the terms and conditions of any bona fide offer relating to a proposed Assignment by Franchisee, and (ii) all available information concerning Franchisee's Assignee including a detailed summary of how the proposed assignee meets Franchisor's qualifications for a new BHC franchisee, and any other related information requested by Franchisor. If the specified terms and conditions include consideration of a non-monetary nature, such consideration must be expressed in reasonably equivalent monetary terms, and if it involves matters that cannot be stated in monetary terms, such consideration will not be considered in connection with Franchisor's right of first refusal.
- (c) Within 15 days after Franchisor's receipt of such notice (or if Franchisor requests additional information, within 10 days after receipt of such additional information), Franchisor may either (i) consent or withhold Franchisor's consent to such Assignment by Franchisee, in accordance with section 12.2 hereof, or (ii) at Franchisor's option, accept the Assignment by Franchisee itself or on behalf of Franchisor's nominee upon the terms and conditions specified in the notice.
- (d) If Franchisor elects not to exercise its right of first refusal and consent to the Assignment by Franchisee, Franchisee will for a period of 60 days, and subject to the provisions of section 12.2 hereof, be free to assign this Agreement to such proposed Assignee upon the terms and conditions
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, when a franchisee wants to assign their franchise, Bhc has specific options. The franchisee must first provide written notice to Bhc, including the proposed transferee's name and address, copies of all agreements related to the transfer, and the proposed transferee's application for approval. This ensures Bhc has complete information about the potential new franchisee. Bhc will then inform both the franchisee and the proposed transferee of any additional required information to complete the application.
Within 15 days of receiving the notice (or 10 days after receiving additional requested information), Bhc has the option to either consent to or withhold consent for the assignment. Alternatively, Bhc can choose to exercise its right of first refusal. This means Bhc can accept the assignment itself or nominate another party to take over the franchise under the same terms and conditions offered by the proposed assignee.
If Bhc decides not to exercise its right of first refusal and consents to the assignment, the franchisee is then free to assign the agreement to the proposed assignee within a 60-day period, provided they still comply with the assignment terms outlined in the franchise agreement. Bhc's consent to one assignment does not apply to future assignments, meaning the franchisee must go through this process each time they wish to transfer the franchise.
This right of first refusal does not apply if the transfer is to the franchisee's heirs, personal representatives, or conservators in the event of death or legal incapacity. This process ensures that Bhc maintains control over who operates its franchises and can ensure that any new franchisees meet their standards. For a prospective franchisee, this means understanding that selling their franchise is subject to Bhc's approval and potential intervention.