If a Bhc franchisee dies, what relatives can the franchise interest be transferred to without it being considered an assignment?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
12.4 Transfers upon the Death or Incapacity of an Individual Franchisee or Majority Equity Owner.
(a) Notwithstanding the foregoing, in the event of Franchisee's death or legal incapacity if Franchisee is an individual, or the death or legal incapacity of a Principal Equity Operator of Franchisee owning a majority equity interest ("Majority Equity Owner") in Franchisee (if an entity), the transfer of Franchisee's or the deceased Majority Equity Owner's interest in this Agreement to his or her spouse, parent or adult children, will not be deemed Assignment by Franchisee, provided a qualified and trained General Manager remains employed at the Franchised BHC Restaurant or another responsible management employee or agent of Franchisee satisfactorily trained by Franchisor will be responsible for the Franchised Business.
(b) In the event of an individual Franchisee's death or the death of a Majority Equity Owner, such person's interest in this Agreement or its equity interest in the franchise entity must Transfer as soon as practicable (but not more than 270 days) after the date of death in accordance with such person's will or, if such person dies without a will, in accordance with laws of intestacy governing the distribution of such person's estate, provided that adequate provision is made for the management of the Franchised Business.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, in the event of the death or legal incapacity of an individual franchisee, or the death or legal incapacity of a Principal Equity Operator owning a majority equity interest in the franchise, the transfer of the franchise interest to specific relatives will not be considered an assignment. This allowance applies to the franchisee's spouse, parent, or adult children. This provision aims to provide a smoother transition of ownership within the immediate family upon the franchisee's death or incapacitation.
However, this transfer without being deemed an assignment is conditional. A qualified and trained General Manager must remain employed at the Bhc restaurant. Alternatively, another responsible management employee or agent of the franchisee, satisfactorily trained by Bhc, must be responsible for the franchised business. This condition ensures that the restaurant continues to be managed competently, maintaining the brand's standards and operational efficiency even after the franchisee's passing.
The FDD also stipulates that the transfer of the franchise interest or equity must occur as soon as practicable, but no later than 270 days after the date of death. This transfer must align with the deceased's will or, in the absence of a will, with the laws of intestacy governing the distribution of the estate. Adequate provisions must also be in place for the continued management of the Bhc franchised business during this transition period. This timeline and the requirement for proper management ensure business continuity and compliance with legal and contractual obligations.