Does the non-competition covenant after termination or assignment of the Bhc Multi-Unit Master Franchise Agreement apply to other Master Franchised Bhc Restaurants?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Multi-Unit Master Franchise Agreement | Summary |
|---|---|---|
| r. Non-competition covenants during the term of the franchise | 5.1 | No involvement in competing business anywhere. |
| s. Non-competition | 11.1 | No competing business for two years within 25 miles of your Master Franchised BHC Restaurant or any other Master Franchised BHC Restaurant or other retail location (this obligation also applies to you if you assign your franchise). The MFA refers to the confidentiality and non-competition covenant in the last MFA you sign. (This provision is subject to state law.) |
| covenants after | ||
| the franchise is | ||
| terminated or | ||
| expires |
Source: Item 17 — Renewal, Termination, Transfer, And Dispute Resolution (FDD pages 43–49)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the non-competition covenant after termination or assignment of the Multi-Unit Master Franchise Agreement does indeed extend to other Master Franchised Bhc Restaurants. Specifically, it states that you cannot be involved in any competing business for two years within 25 miles of your Master Franchised Bhc Restaurant or any other Master Franchised Bhc Restaurant or other retail location. This obligation applies if you assign your franchise. This provision is subject to state law.
This means that if you, as a Bhc franchisee, decide to terminate your agreement or assign your franchise, you are restricted from engaging in any competing business within a 25-mile radius of not only your own Bhc restaurant but also any other Bhc restaurant that is master franchised. This restriction lasts for two years. The inclusion of "any other Master Franchised Bhc Restaurant" significantly broadens the scope of the non-compete clause, potentially limiting your future business opportunities within the covered area.
Prospective franchisees should carefully consider the implications of this extended non-compete clause. It is essential to understand the geographic distribution of other Bhc Master Franchised Restaurants in relation to your intended area of operation. This will help you assess the potential impact on your future business ventures should you decide to exit the Bhc system. Furthermore, given that this provision is subject to state law, it is advisable to consult with a legal professional to understand how this clause is interpreted and enforced in your specific state.