What happens if the terms of a Bhc Master Franchise assignment are modified in any material manner after the Franchisor declines to exercise its right of first refusal?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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 specified in said notice. If, however, these terms are modified in any material manner (as determined by Franchisor), or if said 60-day period expires, Franchisor will again have such right of first refusal with respect thereto and Franchisee will again be required to comply with section 12.3(b) above.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if the terms of a Master Franchise assignment are modified in any material way after Bhc declines to exercise its right of first refusal, Bhc will again have the right of first refusal. In this case, the Master Franchisee is required to comply again with section 12.3(b), which involves delivering a written notice to Bhc with all the terms and conditions of the proposed assignment and information about the assignee.
This means that even after Bhc initially passes on the opportunity to take over the Master Franchise under the original terms, any significant changes to the deal will trigger a new evaluation period. Bhc gets another chance to review the modified terms and decide whether to approve the assignment, take it over themselves, or nominate another party. The determination of what constitutes a 'material manner' is made by Bhc.
For a prospective Master Franchisee, this highlights the importance of finalizing all assignment terms before submitting the initial notice to Bhc. Any renegotiation after Bhc's initial refusal could delay or complicate the assignment process, as it essentially restarts the clock on Bhc's review period. The Master Franchisee should aim for a complete and stable offer to avoid triggering this second right of first refusal and ensure a smoother transfer.