If the consideration for a proposed Bhc Master Franchise assignment includes non-monetary items, how are these items treated with respect to the Franchisor's right of first refusal?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Master 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 Master Franchisee, and (ii) all available information concerning Master Franchisee's Assignee including a detailed summary of how the proposed assignee meets Franchisor's qualifications for a new BHC Master 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.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, when a Master Franchisee proposes an assignment that includes non-monetary consideration, specific procedures apply regarding Bhc's right of first refusal. The Master Franchisee must provide written notice to Bhc that includes all terms and conditions of the offer. If any of these terms involve non-monetary consideration, the Master Franchisee must express these in reasonably equivalent monetary terms.
However, if any part of the consideration involves matters that cannot be stated in monetary terms, Bhc will not consider that non-monetary consideration when deciding whether to exercise its right of first refusal. This means Bhc will primarily focus on the monetary aspects of the offer when determining whether to accept the assignment itself or nominate another party to do so.
This policy ensures that Bhc can make a fair and objective decision based on quantifiable financial terms. It also protects Bhc from having to evaluate subjective or difficult-to-value non-monetary items. For a prospective Master Franchisee, this means that any non-monetary benefits they hope to receive as part of an assignment deal may not factor into Bhc's decision to approve or reject the transfer. Therefore, it is crucial to ensure that the monetary component of any proposed assignment is attractive enough for Bhc to consider waiving its right of first refusal.