Can the Master Franchisee modify the terms of an approved Bhc Subfranchise Agreement or Other Agreement without Franchisor approval?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, once a form Subfranchise Agreement or Other Agreement has been approved, Master Franchisee shall not modify the terms of such form documents without submitting to and receiving Franchisor's prior written approval of such modified form documents.
Master Franchisee's form Subfranchise Agreement and Other Agreements shall include terms and conditions consistent with this Agreement and as prescribed by Franchisor from time to time, including the maximum size of the territory granted under any Subfranchise Agreement or Other Agreement.
Executed copies of each Subfranchise Agreement and any related Other Agreements shall be sent to Franchisor before the opening of the relevant approved BHC Restaurant for Franchisor's records.
Executed copies of any Other Agreements Master Franchisee enters into with Subfranchisees shall be sent to Franchisor within thirty (30) days of the date of execution.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee cannot modify the terms of an approved Subfranchise Agreement or Other Agreement without prior written approval from Bhc. The Master Franchisee must submit any proposed form Subfranchise Agreement or Other Agreement to Bhc for approval before entering into such agreements with a prospective subfranchisee. Once a form agreement is approved, any modifications require further written approval from Bhc. These agreements must also include terms and conditions consistent with the Master Franchise Agreement and as prescribed by Bhc. Executed copies of all Subfranchise Agreements and Other Agreements must be sent to Bhc for their records before the relevant Bhc Restaurant opens. Additionally, executed copies of any Other Agreements must be sent to Bhc within thirty days of execution.
This requirement ensures that all Subfranchise Agreements and Other Agreements align with Bhc's standards and protect the brand's interests. By retaining approval rights over these agreements, Bhc maintains control over the terms and conditions under which subfranchisees operate. This helps to ensure consistency across all Bhc locations and compliance with the overall franchise system.
For a prospective Master Franchisee, this means that they must adhere to Bhc's established agreement templates and seek approval for any deviations. This may add an extra layer of administrative work, but it also provides a level of security knowing that Bhc has reviewed and approved the terms. It is important for the Master Franchisee to maintain open communication with Bhc and promptly submit all required documents to avoid delays in the subfranchising process.
Overall, this provision is typical in franchising, as franchisors generally want to maintain control over the agreements used within their system to ensure uniformity and protect their brand standards. A prospective Master Franchisee should carefully review the approved forms and understand the process for requesting modifications to ensure they can effectively manage their subfranchise relationships within the bounds set by Bhc.