What must Bhc do to make an assignment of the lease effective?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- C.
At or after the time Franchisor assumes Tenant's interests under the Lease, the Franchisor may, at any time, assign such interests or sublet the Premises to a BHC franchisee.
Any such assignment
shall be subject to the prior written consent of the Landlord, which Landlord shall not unreasonably withhold as it relates to a creditworthy franchisee who otherwise meets Franchisor's then-current standards and requirements for franchisees and agrees to operate the restaurant as a BHC Restaurant pursuant to a Franchise Agreement with Franchisor. Upon receipt by Landlord of an assumption agreement pursuant to which the assignee agrees to assume the Lease and to observe the terms, conditions, and agreements on the part of Tenant to be performed under the Lease, the Franchisor shall thereupon be released from all liability as tenant under the Lease from and after the date of assignment, without any need of a written acknowledgement of such release by Landlord.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, for Bhc to effectively assign its interests or sublet the premises to a franchisee, it must obtain prior written consent from the landlord. This consent cannot be unreasonably withheld, especially if the franchisee is creditworthy, meets Bhc's standards, and agrees to operate the restaurant under a Franchise Agreement with Bhc.
Additionally, the landlord must receive an assumption agreement where the assignee commits to adhering to the terms, conditions, and agreements initially set for the tenant under the lease. Once the landlord receives this agreement, Bhc is released from all liabilities as the tenant from the assignment date onward, without needing a written acknowledgment of release from the landlord.
This process ensures that while Bhc can transfer the lease to a new franchisee, the landlord retains a degree of control over who occupies the premises. The landlord can ensure the new tenant is financially stable and meets the operational standards necessary to maintain the property's value and reputation. For a prospective franchisee, this means that securing landlord approval is a critical step in finalizing the lease assignment and commencing operations.