Does the General Manager of a Bhc Master Franchise Business need to have an equity interest in the business?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
The day-to-day operations of your Master Franchise Business and Master Franchise BHC Restaurant must be always managed by you or a full-time "General Manager" who has satisfactorily completed our training program. Your General Manager's responsibilities will be to (i) establish, implement and monitor food safety and quality policies, (ii) establish measurable food safety and quality objectives, (iii) ensure compliance with quality and food safety policies and procedures at all Master Franchise BHC Restaurants with the Development Area, and (iv) develop and implement business continuity policies. Your General Manager need not have an equity interest in the business but must agree in writing not to compete against us and to preserve confidential information to which they have access and not to compete with you, us, and other franchisees. We may regulate the form of agreement that you use and be a third-party beneficiary of that agreement with independent enforcement rights.
You are required to inform us immediately of a change of the General Manager of your business operation.
Source: Item 15 — Obligation to Participate in The Actual Operation of The Franchise Business (FDD pages 42–43)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the General Manager of a Master Franchise Business is not required to have an equity interest in the business. However, the General Manager must agree in writing not to compete against Bhc and to preserve confidential information they have access to, and also not to compete with the franchisee, Bhc, and other franchisees. Bhc may regulate the form of agreement used and be a third-party beneficiary of that agreement with independent enforcement rights.
This means that while a franchisee can hire a General Manager to oversee the daily operations, that manager does not need to own a portion of the business. This provides flexibility for the franchisee in structuring their management team. However, it is crucial that the General Manager signs a non-compete and confidentiality agreement to protect Bhc's interests.
This arrangement is fairly common in the franchise industry, where franchisors often allow franchisees to hire managers without requiring equity, as long as brand standards and confidential information are protected. The franchisee must inform Bhc immediately if there is a change in the General Manager.