What is the length of each renewal term for a Bhc Master Franchise Agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
t. Any failure to comply with the obligations set forth in the Franchise Agreement will result in cross-default in the MFA. If the MFA is terminated prior to its expiration for cause, all Franchise Agreement will be automatically terminated.
5.2 Renewal Terms.
(a) Upon written notice delivered to Franchisor not less than 120 days before the end of the existing term hereof, Master Franchisee may renew its rights granted under this Agreement for additional 10-year terms commencing on the expiration date of the previous term, subject to the provisions of sections 5.2(b) through 5.2(g) below.
(b) At the time of renewal, Master Franchisee must (i) then be solvent (which means that Master Franchisee is able to pay its debts as and when promised by Master Franchisee and that Master Franchisee has assets that are greater than its debts), (ii) not have Abandoned the BHC Restaurant, (iii) not be operating the Franchise in a manner that endangers public health or safety or materially harms the BHC brand or reputation, and (iv) not have knowingly submitted false or incomplete reports to Franchisor during the expiring term.
(c) Notwithstanding section 5.2(a) above, Franchisor is not obligated to renew Master Franchisee's rights granted under this Agreement for an additional term if one or more of the following applies or occurs:
- (i) Master Franchisee gives Franchisor written notice of Master Franchisee's intention not to renew this Agreement at least 120 days before the expiration of the initial term or any successor term;
- (ii) Termination of this Agreement would be permitted pursuant to sections 13.1 or 13.2 hereof;
- (iii) Master Franchisee and Franchisor agree not to renew the Franchise;
- (iv) Franchisor withdraws from distributing its products or services through Franchises in the geographic market served by Master Franchisee.
- (v) At the time of renewal, Master Franchisee or any Principal Equity Operator has been convicted of a felony or a crime involving moral turpitude, consumer fraud or any other offense that is reasonably likely, in Franchisor's judgment, to have a materially adverse effect on the Marks, the System, or the goodwill associated with the Marks or System; or
(d) As a condition to renewing Master Franchisee's rights, duties and obligations hereunder, not later than 90 days before the end of the term that is expiring, Master Franchisee and Franchisor must sign either (i) Franchisor's then-current standard Franchise Agreement modified by addendum to remove provisions that only apply to a new Master Franchisee, such as initial franchise fee and initial training requirements ("Renewal Franchise Agreement") or (ii) an addendum to this Agreement extending its term for an additional 10 year term. IN ADDITION TO NOT GRANTING ANY ADDITIONAL RIGHTS BEYOND THOSE GRANTED IN THIS AGREEMENT, THE RENEWAL FRANCHISE AGREEMENT MAY CONTAIN OTHER TERMS THAT ARE SUBSTANTIALLY DIFFERENT FROM THOSE IN THIS AGREEMENT. The Renewal Franchise Agreement, when executed, will supersede this Agreement.
(e) At the time of renewal, Master Franchisee must have satisfied all monetary obligations owed by Master Franchisee to Franchisor and to Franchisor's affiliates and all other material obligations under this Agreement, and Franchisor may examine Master Franchisee's books and records to verify compliance with this requirement anytime during normal business hours within 120 days of Master Franchisee's renewal date.
(f) Before or not later than 90 days after Master Franchisee's execution of a Renewal Franchise Agreement for an additional term, Master Franchisee must make such physical modifications (i.e., remodel) to Master Franchised BHC Restaurant as are reasonably necessary so that they are substantially consistent with the then current Trade Dress and System requirements, and so that they can accommodate new BHC Products, if any. Master Franchisee must also bring Master Franchised BHC Restaurant and e
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee can renew their rights under the agreement for additional terms of 10 years each, commencing on the expiration date of the previous term. To renew, the Master Franchisee must provide written notice to Bhc at least 120 days before the end of the current term.
However, Bhc has specific conditions that must be met for a renewal to be granted. The Master Franchisee must be solvent, must not have abandoned the BHC Restaurant, must not be operating in a way that endangers public health or harms the Bhc brand, and must not have knowingly submitted false reports to Bhc during the expiring term.
Bhc is not obligated to renew the Master Franchise Agreement if the Master Franchisee provides written notice of their intention not to renew at least 120 days before the term expires, if termination of the agreement would be permitted under sections 13.1 or 13.2, if both parties agree not to renew, or if Bhc withdraws from distributing its products or services in the Master Franchisee's geographic market. Additionally, renewal may be denied if the Master Franchisee or any Principal Equity Operator has been convicted of a felony or a crime involving moral turpitude that could adversely affect Bhc's brand or system.
As a condition of renewal, the Master Franchisee and Bhc must sign a Renewal Franchise Agreement or an addendum extending the term for another 10 years no later than 90 days before the end of the expiring term. The Master Franchisee must also have met all monetary and material obligations under the agreement. Before or within 90 days after signing the Renewal Franchise Agreement, the Master Franchisee must remodel the BHC Restaurant to meet current standards and accommodate any new BHC products. A Renewal Fee of $40,000.00 must be paid to Bhc when the Renewal Franchise Agreement is signed.