What remedies, besides termination, are available to Bhc if the franchisee breaches the agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ent, Franchisor also has the right, to be exercised in its sole discretion, to grant to Franchisee in writing only, in lieu of termination of this Agreement, an extended period of time to cure the breach which gave rise to Franchisor's right to terminate, but in no event may such extended cure period exceed six months from the last day of the cure period otherwise applicable to such breach. Franchisee acknowledges that Franchisor's election to grant an extended cure period to Franchisee will not operate as a waiver of any of Franchisor's rights hereunder.
13.7 Franchisor's Right to Cure Franchisee's Defaults.
- (a) In addition to all other remedies herein granted, if Franchisee breaches in the performance of any of Franchisee's obligations or breaches any term or condition of this Agreement or any related agreement involving third parties, Franchisor may, at Franchisor's election, immediately or at any time thereafter, without waiving any claim for breach hereunder and without notice to Franchisee, cure the breach for Franchisee's account and on Franchisee's behalf, and all costs or expenses including attorney's fees incurred by Franchisor on account thereof are due and payable by Franchisee to Franchisor on demand.
- (b) If Franchisor terminates this Agreement for cause, Franchisor has the right (but not the obligation) to assume the lease for the Franchised BHC Restaurant premises and to purchase Franchisee's assets pursuant to section 15.2(d) below.
13.8 Waiver and Delay.
No waiver by Franchisor of any breach or series of breaches in performance by Franchisee and no failure, refusal or neglect of Franchisor either to exercise any right, power or option given to Franchisor hereunder or to insist upon strict compliance with or performance of Franchisee's obligations under this Agreement or the Operations Manual, constitutes a waiver of the provisions of this Agreement or the Operations Manual with respect to any subsequent breach thereof or a waiver by Franchisor of its right at any time thereafter to require exact and strict compliance with the provisions thereof.
13.9 Collection Costs.
Franchisor is entitled to reimbursement from Franchisee upon Franchisor's demand of all costs Franchisor has incurred (including reasonable attorneys' fees and investigator's fees) to enforce Franchisor's rights under this Agreement, including actions to collect any amounts due and delinquent hereunder.
13.10 Continuance of Business Relations.
Any continuance of business relations between Franchisee and Franchisor after termination of this Agreement will not be construed as a renewal, extension, or continuation of this Agreement.
14. DISPUTE RESOLUTION
14.1 Initial Steps to Resolve a Dispute; Mediation.
- (a) Franchisor and Franchisee have entered into a long-term franchise relationship which gives rise to an obligation, subject to and consistent with the terms of this Agreement, to endeavor to make the relationship succeed, considering the overall best interests of the entire BHC system, as contemplated by this Agreement. To that end, Franchisee and Franchisor acknowledge that Franchisee and Franchisor need to attempt to resolve disagreements or disputes before such disagreements or disputes negatively impact the relationship. Good faith communications between Franchisee and Franchisor are important aspects of that obligation.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, in the event of a franchisee breach, Bhc has several remedies available in addition to termination. Bhc can elect to cure the franchisee's breach on the franchisee's behalf, with all associated costs, including attorney's fees, payable by the franchisee upon demand. Bhc is also entitled to reimbursement from the franchisee for all costs incurred to enforce its rights under the agreement, including reasonable attorneys' and investigator's fees, especially for actions to collect delinquent amounts.
Bhc retains the option to pursue alternative remedies instead of terminating the agreement entirely, at its sole discretion. This can include exercising any and all remedies available at law or in equity, such as specific performance and damages, which may encompass liquidated and punitive damages. These rights and remedies are in addition to, and not in substitution of, all other rights and remedies available to Bhc at law or in equity.
Furthermore, if the franchise agreement is terminated due to the franchisee's default, the franchisee must promptly pay Bhc a lump sum as damages for the breach and for Bhc's lost future revenue. This amount is calculated based on the average monthly royalty fees, advertising fees, and additional fees payable by the franchisee over the 12 months preceding termination, multiplied by the lesser of 36 months or the remaining months in the agreement's term. This lump sum payment is in lieu of damages for lost future revenue but is in addition to all other amounts owed to Bhc and other costs and expenses Bhc is entitled to under the agreement. Bhc also retains the right to recover damages other than lost future revenue and to obtain injunctive relief and other remedies to enforce the agreement, trademark rights, and covenants.
These provisions outline the various legal and financial avenues Bhc can pursue should a franchisee fail to meet their contractual obligations. It is important for prospective franchisees to understand these potential ramifications of a breach, as they could face significant financial burdens beyond the loss of their franchise.