What is the Master Franchisee of Bhc required to do to maintain the Franchisor's agreement not to operate or franchise within the Development Area?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the terms and conditions of this Agreement, Franchisor hereby grants to Master Franchisee:
- (a) the exclusive, non-transferable right and license to, (a) establish and operate at least one (1) Franchised BHC Restaurant through Master Franchisee's Affiliate, and (b) after opening at least one (1) Affiliate Franchised BHC Restaurant, to grant subfranchises to Subfranchisees to establish and operate Subfranchised BHC Restaurants in accordance by entering Subfranchise Agreements to establish and operate BHC Restaurants using the BHC System and IP Rights, and in accordance with the Operating Manuals ("Development Rights") with the schedule of openings attached hereto as Exhibit 1 (the "Development Schedule") and within the geographical area (the "Development Area") indicated in the Development Schedule.
- (b) So long as Master Franchisee's obligations under the Development Schedule are being met on a timely basis and until this Agreement terminates, Franchisor will not itself operate a BHC Restaurant within the Development Area, nor allow any of its affiliates or other BHC franchisees to do so. Captive locations will be excluded from Master Franchisee's Development Area and Franchisor has the right to develop or franchise the following Captive location locations: (1) military bases; (2) public transportation facilities; (3) sports facilities, including race tracks; (4) student unions or other similar buildings on college or university campuses; (5) amusement and theme parks; (6) malls; (7) special events; (8) hospitals; (9) hotel, resort, or other lodging facility; (10) state or national parks; (11) exhibition hall; conference facility or convention center; (12) casino or gambling establishment; (13) esports events and venues; (14) street fairs; (15) delivery facilities (e.g.,, ghost kitchens) or (16) any similar area to the sites referenced herein n (collectively, "Captive locations"). Franchisor may not alter the Development
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the franchisor grants the master franchisee the exclusive right to establish and operate a BHC restaurant through an affiliate, and after opening at least one affiliate, to grant subfranchises to subfranchisees to establish and operate BHC restaurants within a specific geographical area known as the Development Area. Bhc agrees not to operate a BHC restaurant or allow its affiliates or other franchisees to do so within the Development Area, as long as the master franchisee meets its obligations under the Development Schedule.
However, this exclusivity is subject to certain conditions and exceptions. Bhc retains the right to develop or franchise captive locations, such as military bases, public transportation facilities, sports facilities, college campuses, amusement parks, malls, special events, hospitals, hotels, state or national parks, exhibition halls, casinos, esports venues, street fairs, and delivery facilities, within the Development Area. The franchisor also has the right to alter the Development Area.
To maintain Bhc's agreement not to operate or franchise within the Development Area, the master franchisee must meet the obligations outlined in the Development Schedule and adhere to the terms of the Master Franchise Agreement. Failure to meet the Development Schedule or comply with the agreement's terms could result in Bhc terminating the agreement and potentially operating or franchising within the Development Area.