What information and documentation must a Bhc franchisee provide to the franchisor regarding a transfer of interest following death or incapacity, and what are the deadlines for providing this information?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) No Transfer under this section 12.4 will be subject to (i) Franchisor's right of first refusal set forth in section 12.3 hereof or (ii) the Transfer Fee set forth in section 12.2(b)(vii) above, although such refusal right and Transfer Fee will be applicable to any subsequent Transfer by Franchisee's (or a Majority Equity Owner's) heirs, personal representatives, or conservators.
However, Franchisee must comply with sections 12.2(b)(i) through (iv) and (to the extent applicable) section 12.2(c) above, as well as provide Franchisor with full disclosure of the terms of said transfer not later than three business days prior to the close of the transaction.
In addition, copies of fully executed paperwork must be delivered to Franchisor no less than three business days following the close of the transaction.
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 a majority equity owner, the transfer of interest in the franchise agreement is addressed specifically. The interest must transfer as soon as practicable, but no more than 270 days after the date of death, according to the person's will or the laws of intestacy if there is no will. This transfer is permitted to a spouse, parent, or adult children, provided that a qualified and trained General Manager remains employed at the Bhc restaurant, or another responsible management employee or agent satisfactorily trained by Bhc is responsible for the franchised business.
While the transfer itself is not subject to Bhc's right of first refusal or a transfer fee, the franchisee must still comply with certain notification and disclosure requirements. Specifically, the franchisee must adhere to sections 12.2(b)(i) through (iv) and, if applicable, section 12.2(c) of the franchise agreement. Additionally, the franchisee must provide full disclosure of the terms of the transfer to Bhc not later than three business days prior to the close of the transaction.
Furthermore, copies of all fully executed paperwork related to the transfer must be delivered to Bhc no less than three business days following the completion of the transaction. This ensures that Bhc is fully informed of the details of the transfer and can maintain accurate records. If these conditions are not met, Bhc has the option to step in and manage the restaurant for a period, especially if there is no qualified successor or heir capable of operating the franchise.