Does the Bhc Master Franchisee have to indemnify Bhc for losses resulting from a breach of the non-competition agreement by the Master Franchisee's General Manager?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Master Franchisee agrees to indemnify Franchisor and hold Franchisor harmless from and against all Losses which Franchisor may sustain as a result of any breach of this Article 11 by Master Franchisee, any Principal Equity Operator, or Master Franchisee's General Manager. Master Franchisee further agrees that a breach of the confidentiality and non-competition covenants set forth above and, in
the Confidentiality, and Non-Competition Agreement (see Exhibit 4 to this Franchise Agreement) will cause immediate and irreparable damage to Franchisor that would be impossible or inadequate to measure and calculate and could not be fully remedied by monetary damages. Accordingly, Franchisor has the right to specifically enforce this Agreement and seek injunctive or other equitable relief as may be necessary or appropriate to prevent such breach or continued breach without the necessity of proving actual damages by reason of any such breach or threatened breach of this Agreement. Master Franchisee further agrees that no bond or other security will be required in obtaining such equitable relief and hereby consents to the issuance of such injunction and to the ordering of specific performance. Master Franchisee further acknowledges that such remedies are in addition to any other rights or remedies, whether at law or in equity, which may be available to Franchisor, including monetary damages.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee is required to indemnify Bhc for losses resulting from a breach of the non-competition agreement by the Master Franchisee's General Manager. Specifically, the Master Franchisee agrees to protect Bhc from Losses sustained due to a breach of Article 11 by the Master Franchisee, any Principal Equity Operator, or the Master Franchisee's General Manager.
This obligation extends to breaches of confidentiality and non-competition covenants outlined in the agreement and its exhibits. Bhc retains the right to seek injunctive or other equitable relief to prevent breaches, without needing to prove actual damages. The Master Franchisee consents to the issuance of injunctions and specific performance orders, acknowledging that these remedies are in addition to any other legal or equitable options available to Bhc, including monetary damages.
This means that if the General Manager of a Bhc Master Franchisee violates the non-competition agreement, the Master Franchisee is financially responsible for any losses Bhc incurs as a result. This could include damages, legal fees, and other costs associated with enforcing the non-competition agreement. Prospective Master Franchisees should carefully review the non-competition covenants and understand their obligations to ensure compliance by themselves, their Principal Equity Operators, and their General Manager to avoid potential liabilities.