What must the Bhc Master Franchisee do before any assignment of the franchise?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
provided for in section 12.3 hereof, and transfer to an Affiliated Entity provided for in section 12.6 hereof. Franchisor's consent to a specific Assignment by Master Franchisee is not cumulative and will not apply to any subsequent assignments, in respect of each of which Master Franchisee must comply with this section 12.2.
(b) Prior to any Assignment by Master Franchisee, Master Franchisee must notify Franchisor of Master Franchisee's intent to sell, transfer or assign the Franchise, all (or substantially all) the assets of the BHC Restaurant, or a controlling or non- controlling interest in Master Franchisee (if an entity). The notice must be in writing, delivered to Franchisor in accordance with section 16.1 hereof and include the following:
(i) the proposed transferee's name and address;
(ii) a copy of all agreements related to the sale, assignment, or transfer of the Franchise, the assets of the BHC Restaurant, or the controlling interest in Master Franchisee (if an entity); and
(iii) the proposed transferee's application for approval to become the successor Master Franchisee (this application must include all forms, financial disclosures and related information generally used by Franchisor when interviewing prospective new Master Franchisees, if Franchisor makes those forms available to Master Franchisee. If the forms are not readily available, Master Franchisee must request that Franchisor deliver the forms to Master Franchisee by business courier in accordance with section 16.1 hereof within 15 calendar days). As soon as practicable after the receipt of the proposed transferee's application, Franchisor will notify, in writing, Master Franchisee and the proposed transferee of any additional information or documentation necessary to complete the transfer application. If Franchisor's then-existing standards for the approval of new or renewing Master Franchisees are not readily available to Master Franchisee when Master Franchisee notifies Franchisor of Master Franchisee's intent to sell, transfer, or assign the Franchise, all or substantially all of the assets of the BHC Restaurant, or a controlling or non-controlling interest in Master Franchisee (if an entity), Franchisor will communicate the standards to Master Franchisee within 15 calendar days.
(iv) a non-refundable "Transfer Review Fee" of $5,000.00, or such greater amount as is necessary to reimburse Franchisor's out of pocket costs associated with the transfer/assignment, including attorneys' fees.
(c) Within 60 days after the receipt of all necessary information and documentation required pursuant to section 12.2(b) above, or as specified by other written agreement between Franchisor and Master Franchisee, Franchisor will notify Master Franchisee of the approval or disapproval of the proposed Assignment by Master Franchisee. The notice will be in writing and delivered to Master Franchisee by business courier in accordance with section 16.1 hereof.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee intending to assign their franchise must first notify Bhc in writing. This notification must include the proposed transferee's name and address, copies of all agreements related to the sale, assignment, or transfer of the franchise assets, and the proposed transferee's application for approval to become the successor Master Franchisee. This application should include all forms, financial disclosures, and related information generally used by Bhc when interviewing prospective new Master Franchisees, if Bhc makes those forms available.
Additionally, before any assignment, the Master Franchisee must bring all accounts with Bhc current and transfer to the assignee all service agreements or contracts signed by customers of the franchised business. The Master Franchisee must also execute an agreement among themselves, Bhc, and the assignee, which will include a mutual release between the Master Franchisee and Bhc. Furthermore, they must enter into an assignment of the lease for the Bhc Restaurant premises, including assigning all rights, title, and interest to telephone numbers and utilities to the assignee.
The Master Franchisee must have also complied fully with all of their material obligations to Bhc under the agreement or any other agreement with Bhc. The assignee must agree to employ a General Manager successfully trained by Bhc to operate the restaurant at all times. The assignee must also agree to have necessary personnel satisfactorily complete Bhc's Initial Training program and any other required training programs within 30 days of executing the Franchise Agreement, and pay for all expenses related to this training, such as travel. Finally, upon approval of the transfer, the Master Franchisee must pay Bhc a nonrefundable "Transfer Fee" of 100% of Bhc's then-current Initial Franchise Fee per BHC Restaurant.
Failure to comply with these requirements or attempting to assign the franchise without Bhc's consent can result in a material breach of the agreement, immediate termination of the agreement, and the assignment being void. Bhc's consent to a specific assignment is not cumulative and does not apply to any subsequent assignments, each of which requires compliance with these conditions. This ensures that Bhc maintains control over who operates its franchises and that any new franchisee meets its standards and obligations.