What liability does Bhc incur to the Landlord when entering the premises after lease expiration or termination?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the expiration or termination of the Lease, Landlord will cooperate with and assist Franchisor in gaining possession of the Premises and, if the Franchisor Entity does not elect to assume the Lease for the Premises consistent with subparagraphs 3or 4above, Landlord will allow Franchisor to enter the Premises, without being guilty of trespass and without incurring any liability to Landlord except for any damages caused by Franchisor's willful misconduct or gross negligence, to remove all signs and all other items identifying the Premises as a BHC Restaurant and to make such other modifications (such as repainting) as are reasonably necessary to protect the BHC marks and system, and to distinguish the Premises from BHC Restaurants.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, when a lease expires or is terminated, the landlord is expected to assist Bhc in gaining possession of the premises. If Bhc chooses not to assume the lease, the landlord will allow Bhc to enter the premises. Bhc's liability to the landlord is limited to damages caused by Bhc's willful misconduct or gross negligence.
Bhc is permitted to enter the premises to remove signs and other items that identify it as a Bhc restaurant. Bhc can also make modifications, such as repainting, to protect its marks and system and to differentiate the location from Bhc restaurants. This access allows Bhc to protect its brand identity and prevent consumer confusion even after a franchise location closes.
This clause protects Bhc from standard trespass claims or other liabilities when accessing a former franchise location to de-identify it. However, it also makes Bhc responsible for any damages caused by intentional or grossly negligent actions during the process of removing signage or modifying the premises. This is a fairly standard clause in franchise agreements, as it balances the franchisor's need to protect its brand with the landlord's property rights.