Does Bhc require franchisees to warrant the accuracy of all statements made in section 18.1 of the franchise agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
FDD that was provided to Master Franchisee.
- (c) This Agreement cannot be modified or changed except by written instrument signed by all of the parties hereto.
17. EFFECTIVENESS OF AGREEMENT
This Agreement will become effective upon its execution by Master Franchisee and Franchisor. HOWEVER, THIS AGREEMENT IS NOT BINDING ON FRANCHISOR UNLESS AND UNTIL IT HAS BEEN ACCEPTED AND SIGNED BY FRANCHISOR.
18. ACKNOWLEDGMENTS AND REPRESENTATIONS
18.1 Acknowledgments and Representations.
(a) Master Franchisee hereby represents and warrants that all statements in this section 18.1 are true and accurate.
(b) Master Franchisee does not seek to obtain the Franchise for speculative or investment purposes and has no present intention to sell or transfer or attempt to sell or transfer the Franchised Business or the Franchise within 12 months after the Opening Date.
(c) Master Franchisee understands and acknowledges the value to the System of uniform and ethical standards of quality, appearance and service described in and required by the Operations Manual and the necessity of operating the Franchised Business under the standards set forth in the Operations Manual. Master Franchisee represents that it has the capabilities, professionally, financially, and otherwise, to comply with Franchisor's standards.
(d) If Master Franchisee is an entity, Master Franchisee is duly organized and qualified to do business in the state and any other applicable jurisdiction within which the BHC Restaurant is located.
(e) Master Franchisee's execution of this Agreement will not constitute or violate any other agreement or commitment to which Master Franchisee is a party.
(f) Any individual executing this Agreement on Master Franchisee's behalf is duly authorized to do so and the Agreement constitutes a valid and binding obligation of Master Franchisee and all of Master Franchisee's Principal Equity Operators.
(g) Master Franchisee and its Principal Equity Operators (i) understand the nature of this Agreement, and (ii) intend to comply with the terms hereof and be bound hereby.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, both the franchisee and master franchisee must represent and warrant that all statements made in section 18.1 of the franchise agreement are true and accurate. This requirement ensures that the parties entering the agreement are held accountable for the information they provide. Bhc aims to establish a transparent and reliable business relationship with its franchisees.
This representation and warranty cover several key aspects. These include assurances that the franchisee is not seeking the franchise for speculative or investment purposes and has no immediate plans to sell or transfer the business within the first year. It also confirms the franchisee's understanding of the importance of maintaining uniform and ethical standards as outlined in Bhc's Operations Manual, as well as their capability to meet these standards financially and professionally.
For franchisees that are entities, there is a representation that they are properly organized and qualified to conduct business in the relevant jurisdiction. Additionally, the execution of the agreement must not violate any other existing agreements or commitments, and any individual signing on behalf of the franchisee must be duly authorized to do so, making the agreement a valid and binding obligation.
This requirement is a standard practice in franchising, designed to protect the franchisor by ensuring the franchisee is committed, capable, and legally compliant. Prospective Bhc franchisees should carefully review all statements in section 18.1 to ensure they can truthfully and accurately represent the information before signing the agreement.