Does Bhc require a prospective franchisee to disclose any existing legal relationships with Prohibited Persons?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. The Prospective Franchisee represents, warrants and covenants to BHC USA LLC ("BHC") that all of the following matters are true and accurate as of the date of execution of this Acknowledgment and Authorization for Background Check ("Acknowledgment"):
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- No Prospective Franchisee and his/her/its Affiliates (as that term is defined below) had or has any relationship, affiliation, or ownership interest, directly or indirectly, with BHC USA or its Affiliates ("Prohibited Persons"). "Affiliates" mean a party's respective present and former, direct and indirect, parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses (for individuals), including any other person directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such person. "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
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In addition, if the Prohibited Persons have any right or legal relationship with the Prospective Franchisee, claim/debt, employment, delegation, or other right or legal relationship, regardless of whether real name/borrowed name or registered/non-registered, the Prospective Franchisee shall immediately notify BHC in writing.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a prospective franchisee must disclose any existing legal relationships with "Prohibited Persons." The document defines "Prohibited Persons" as Bhc USA LLC or its Affiliates. Affiliates include present and former, direct and indirect, parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses. This extends to any person who directly or indirectly controls, is controlled by, or is under common control with such person.
Bhc requires that if any Prohibited Persons have any right or legal relationship with the prospective franchisee, including claims, debts, employment, delegation, or other legal relationships, the prospective franchisee must immediately notify Bhc in writing. This disclosure requirement applies regardless of whether the relationship is under a real or borrowed name, or whether it is registered or unregistered.
This requirement ensures transparency and helps Bhc avoid potential conflicts of interest or legal issues. By requiring disclosure, Bhc aims to maintain the integrity of its franchise system and protect its interests. A prospective franchisee should carefully review the definition of "Prohibited Persons" and ensure full compliance with this disclosure requirement to avoid any issues during the application process.