What is the required procedure for a Bhc Master Franchisee to assign their agreement to an Affiliated Entity?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
12.6 Transfers from Master Franchisee to an Affiliated Entity.
- (a) Upon not less than 30 days' prior written notice to Franchisor, Master Franchisee may, upon Franchisor's written consent, assign and transfer this Agreement at its entirety to an entity that is (i) organized to operate as a developer of BHC Restaurants and (ii) entirely owned by Master Franchisee ("Affiliated Entity").
- (b) Any assignment and transfer by Master Franchisee of the rights, duties and obligations under this Agreement to an Affiliated Entity must be evidenced by a written instrument, in form reasonably satisfactory to Franchisor, under the terms of which said business entity expressly assumes all of Master Franchisee's rights, duties, and obligations hereunder, whether accrued at the time of such assignment or arising thereafter, and the assignee agrees to be bound by all the terms and provisions of this Agreement to the same extent and in the same manner as Master Franchisee is. A copy of said instrument, executed by both Master Franchisee and said business entity must be delivered to Franchisor before the effective date of the transfer. Master Franchisee will not be able to maintain direct ownership and operation of the BHC Restaurants which Master Franchisee (or its Affiliated Entities) has developed after such assignment.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee can assign their agreement to an Affiliated Entity under specific conditions. The Master Franchisee must provide Bhc with at least 30 days prior written notice. Bhc's written consent is required for the assignment to proceed. The entity must be organized to operate as a developer of BHC Restaurants and be entirely owned by the Master Franchisee.
The assignment must be documented in a written instrument that is satisfactory to Bhc. This document must stipulate that the Affiliated Entity assumes all of the Master Franchisee's rights, duties, and obligations under the agreement, including any that have already accrued or may arise in the future. The Affiliated Entity must agree to be bound by all terms and provisions of the Master Franchise Agreement to the same extent as the original Master Franchisee.
A copy of the executed assignment instrument, signed by both the Master Franchisee and the Affiliated Entity, must be delivered to Bhc before the transfer becomes effective. It is important to note that after such an assignment, the Master Franchisee will not be able to maintain direct ownership and operation of the BHC Restaurants that the Master Franchisee (or its Affiliated Entities) has developed. This ensures that the Affiliated Entity takes full responsibility for the development and operation of the restaurants.