What information and documentation must a Bhc Master Franchisee provide to Bhc in the event of 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 Master Franchisee's (or a Majority Equity Owner's) heirs, personal representatives, or conservators. However, Master 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 a transfer of interest due to death or incapacity, a Master Franchisee must adhere to specific requirements. While the transfer itself to a spouse, parent, or adult child is not considered an assignment, the Master Franchisee must still comply with sections 12.2(b)(i) through (iv) and (to the extent applicable) section 12.2(c). Additionally, full disclosure of the transfer terms must be provided to Bhc no later than three business days before the transaction closes, and copies of all executed paperwork must be delivered no later than three business days after the transaction closes.
Section 12.2(b)(i) through (iv) pertains to providing the proposed transferee's name and address, copies of all agreements related to the sale, assignment, or transfer, the proposed transferee's application for approval (including forms, financial disclosures, and related information), and a non-refundable transfer review fee of $5,000.00 (or a greater amount to cover Bhc's out-of-pocket costs). These stipulations ensure Bhc has ample opportunity to assess and approve the transfer, maintaining brand standards and operational integrity.
These requirements do not include Bhc's right of first refusal or the standard transfer fee, but subsequent transfers by heirs or representatives would be subject to these fees. The deadlines for providing information are strict: three business days before closing for the terms of the transfer and three business days after closing for the executed paperwork. This allows Bhc to stay informed and exercise necessary oversight while streamlining the transfer process in sensitive situations like death or incapacity.