Does Bhc require the Master Franchisee to warrant the truth and accuracy of statements in section 18.1?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee is required to warrant the truth and accuracy of all statements made in section 18.1 of the franchise agreement. This means that the Master Franchisee is guaranteeing that the information provided in that specific section is correct and not misleading.
Section 18.1 includes several acknowledgements and representations made by the Master Franchisee. These include assurances that the franchisee is not seeking the franchise for speculative or investment purposes, and has no intention of selling or transferring the franchise within 12 months of opening. The Master Franchisee also acknowledges the importance of maintaining uniform and ethical standards, and confirms they have the capabilities to meet Bhc's operational standards.
Furthermore, if the Master Franchisee is a business entity, they warrant that they are properly organized and qualified to operate in the relevant jurisdiction. They also confirm that entering into the franchise agreement does not violate any other agreements they are party to, and that the person signing the agreement is authorized to do so. By requiring this warranty, Bhc places a legal obligation on the Master Franchisee to ensure the accuracy of these statements, which can have significant legal and financial implications if proven false.