Can a Bhc Master Franchisee transfer to an Affiliated Entity?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
12.6 Transfers from Master Franchisee to an Affiliated Entity.
- (a) Upon not less than 30 days' prior written notice to Franchisor, Master Franchisee may, upon Franchisor's written consent, assign and transfer this Agreement at its entirety to an entity that is (i) organized to operate as a developer of BHC Restaurants and (ii) entirely owned by Master Franchisee ("Affiliated Entity").
- (b) Any assignment and transfer by Master Franchisee of the rights, duties and obligations under this Agreement to an Affiliated Entity must be evidenced by a written instrument, in form reasonably satisfactory to Franchisor, under the terms of which said business entity expressly assumes all of Master Franchisee's rights, duties, and obligations hereunder, whether accrued at the time of such assignment or arising thereafter, and the assignee agrees to be bound by all the terms and provisions of this Agreement to the same extent and in the same manner as Master Franchisee is. A copy of said instrument, executed by both Master Franchisee and said business entity must be delivered to Franchisor before the effective date of the transfer. Master Franchisee will not be able to maintain direct ownership and operation of the BHC Restaurants which Master Franchisee (or its Affiliated Entities) has developed after such assignment.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee can transfer their agreement to an affiliated entity under specific conditions. The Master Franchisee must provide at least 30 days' prior written notice to Bhc and obtain Bhc's written consent for the transfer. The affiliated entity must be organized to operate as a developer of Bhc restaurants and be wholly owned by the Master Franchisee.
The transfer must be documented in a written instrument, satisfactory to Bhc, where the affiliated entity expressly assumes all of the Master Franchisee's rights, duties, and obligations under the agreement. The affiliated entity must agree to be bound by all terms and provisions of the agreement to the same extent as the Master Franchisee. A copy of this instrument, executed by both the Master Franchisee and the affiliated entity, must be delivered to Bhc before the transfer's effective date.
It is important to note that after such a transfer, the Master Franchisee will not be able to maintain direct ownership and operation of the Bhc restaurants that the Master Franchisee or its affiliated entities have developed. This provision ensures that the affiliated entity takes on full responsibility for the franchise operations, preventing the original Master Franchisee from retaining control after the transfer.