If the Master Franchisee transfers their Bhc franchise, what is required before the transferee can operate the BHC Restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) In the event of a Transfer of Master Franchisee's rights, duties, and obligations under this Agreement (which must be done in full compliance with section 12.2 of this Agreement), the transferee's key personnel must be trained by Franchisor as a condition of Franchisor's consent to such Transfer. The transferred BHC Restaurant may not be operated by the transferee until Franchisor accepts the transferee in writing as being qualified to operate the BHC Restaurant and the Franchised Business and Franchisor has otherwise consented to the Transfer in accordance with this Agreement.
12.2 Assignment by Master Franchisee.
(a) This Agreement is being executed by Franchisor in reliance upon and in consideration of the unique skills and qualifications of Master Franchisee and the Principal Equity Operators and the trust and confidence reposed in them by Franchisor. Therefore, neither Master Franchisee's interest in this Agreement and the Franchise granted hereunder, nor all or substantially all of the assets of the BHC Restaurant, nor a controlling or non-controlling interest in Master Franchisee (if an entity), may be assigned, transferred, shared or divided, voluntarily or involuntarily, in whole or in part, by operation of law or otherwise, in any manner (collectively, "Assignment by Master Franchisee"), without Franchisor's prior written consent and, except for any transfer of a non-controlling interest, subject to Franchisor's right of first refusal provided for in section 12.3 hereof, and transfer to an Affiliated Entity provided for in section 12.6 hereof. Franchisor's consent to a specific Assignment by Master Franchisee is not cumulative and will not apply to any subsequent assignments, in respect of each of which Master Franchisee must comply with this section 12.2.
(b) Prior to any Assignment by Master Franchisee, Master Franchisee must notify Franchisor of Master Franchisee's intent to sell, transfer or assign the Franchise, all (or substantially all) the assets of the BHC Restaurant, or a controlling or non- controlling interest in Master Franchisee (if an entity). The notice must be in writing, delivered to Franchisor in accordance with section 16.1 hereof and include the following:
(i) the proposed transferee's name and address;
(ii) a copy of all agreements related to the sale, assignment, or transfer of the Franchise, the assets of the BHC Restaurant, or the controlling interest in Master Franchisee (if an entity); and
(iii) the proposed transferee's application for approval to become the successor Master Franchisee (this application must include all forms, financial disclosures and related information generally used by Franchisor when interviewing prospective new Master Franchisees, if Franchisor makes those forms available to Master Franchisee.
(v) Master Franchisee must have complied fully as of the date of any such Assignment by Master Franchisee with all of Master Franchisee's material obligations to Franchisor, whether under this Agreement or any other agreement, arrangement or understanding with Franchisor;
(vi) Master Franchisee's Assignee agrees (A) a General Manager successfully trained by Franchisor must at all times be employed to operate the BHC Restaurant and (B) Franchisor's Initial Training program described in section 6.1 hereof and any other training or orientation programs then required by Franchisor will be satisfactorily completed by other necessary personnel within 30 days after the execution by Master Franchisee's Assignee of a Franchise Agreement, provided, however, Master Franchisee's Assignee must also agree to pay for all expenses related to this training, such as travel (at the rate in effect at the time of transfer); and
(vii) upon approval of the transfer, Master Franchisee pays Franchisor a nonrefundable "Transfer Fee" of 100% of Franchisor's then-current Initial Franchise Fee per BHC Restaurant
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if a Master Franchisee transfers their rights, duties, and obligations under the agreement, the transferee's key personnel must be trained by Bhc as a condition for Bhc's consent to the transfer. The transferee cannot operate the BHC Restaurant until Bhc accepts the transferee in writing as qualified to operate the BHC Restaurant and the franchised business, and Bhc has consented to the transfer according to the agreement.
Prior to any transfer, the Master Franchisee must inform Bhc of their intent to sell, transfer, or assign the franchise. The notification must be written and include the proposed transferee's name and address, copies of all agreements related to the sale, assignment, or transfer, and the proposed transferee's application for approval to become the successor Master Franchisee. This application should include all forms, financial disclosures, and related information generally used by Bhc when interviewing prospective new Master Franchisees, if Bhc makes those forms available to the Master Franchisee.
Additionally, the Master Franchisee must have complied with all their material obligations to Bhc as of the date of the assignment. The assignee must agree to employ a General Manager successfully trained by Bhc at all times to operate the BHC Restaurant. The assignee must also ensure that other necessary personnel satisfactorily complete Bhc's Initial Training program and any other required training or orientation programs within 30 days after executing a Franchise Agreement. The assignee is responsible for paying all expenses related to this training, such as travel costs. Upon approval of the transfer, the Master Franchisee must pay Bhc a nonrefundable "Transfer Fee" equal to 100% of Bhc's then-current Initial Franchise Fee per BHC Restaurant.
These stipulations ensure that any new operator meets Bhc's standards and is adequately prepared to maintain the quality and consistency of the brand. The financial obligations, such as the transfer fee and training expenses, are significant costs that a prospective transferee must consider. The requirement for a trained General Manager and the completion of training programs highlight the importance Bhc places on operational expertise and adherence to its system.