If Bhc places an interim manager at the Bhc franchisee's restaurant after the franchisee's death, what fees and expenses is the franchisee responsible for paying?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of an individual Master 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. If Franchisor determines (i) there is no imminent sale to a qualified successor or (ii) there is no heir or other Principal Equity Operator capable of operating the Franchise, Franchisor may
(but is not obligated to) immediately commence operating the BHC Restaurant on Master Franchisee's behalf for a period of up to 90 days, renewable as Franchisor deems necessary for up to one year and Franchisor will periodically discuss the status with the heirs of the decedent. Franchisor can place an interim manager Master Franchised BHC Restaurant, and Master Franchisee must pay Franchisor the manager's salary, transportation, lodging and related living expenses, and our management administration fee of 15%.
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 of a Master Franchisee or a Majority Equity Owner, Bhc has the option to operate the BHC Restaurant on behalf of the Master Franchisee for up to 90 days, with possible renewals for up to one year. During this period, Bhc can place an interim manager at the restaurant.
The Master Franchisee is responsible for covering specific costs associated with the interim manager. These costs include the manager's salary, transportation, lodging, and related living expenses.
In addition to these direct expenses, the Master Franchisee must also pay Bhc a management administration fee, which is calculated as 15% of the total costs mentioned above. This means that the total financial burden on the Master Franchisee's estate includes not only the interim manager's expenses but also Bhc's administrative fee for overseeing the management during this transition period.