What rights does the California Business and Professions Code provide to Bhc franchisees concerning termination, transfer, or non-renewal of a franchise?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
| OREGON Department of Insurance and Finance | SOUTH DAKOTA Division of Securities |
|---|---|
| Corporate Securities Section | c/o 118 West Capitol |
| Labor and Industries Building | Pierre, South Dakota 57501 |
| Salem, Oregon 97310 | (605) 773-4013 |
| (503) 378-4387 | |
| Agent: Director of Oregon Department | Agent: Director of South Dakota Division Securities |
| of Insurance and Finance | |
| TEXAS | VIRGINIA |
| Secretary of State | State Corporation Commission |
| P.O. Box 12887 | 1300 East Main Street |
| Austin, Texas 78711 | Richmond, Virginia 23219 (804)371-9051 |
| Agent: Clerk of the State Corporation Commission | |
| RHODE ISLAND | WASHINGTON |
| Division of Securities | Director |
| Suite 232 | Department of Financial Institutions |
| 233 Richmond Street | Securities Division |
| Providence, Rhode Island 02903 | P.O. Box 9033 |
| (401)222-3048 | Olympia, Washington 98507 (360) 902-8760 |
| Agent: Director of Rhode Island Department | |
| of Business Regulation | Agent: Securities Administrator, Director of Department of Financial Institutions |
| WISCONSIN | |
| Securities and Franchise Registration | |
| Wisconsin Securities Commission | |
| P.O. Box 1768 | |
| Madison, Wisconsin 53703 | |
| (608) 266-8559 | |
| Agent: Wisconsin Commissioner of Securities | |
EXHIBIT "G"
BHC USA LLC
STATE SPECIFIC ADDENDA
EXHIBIT "G" APPENDIX FOR CALIFORNIA FRANCHISEES
The registration of this franchise offering by the California Department of Financial Protection and Innovation does not constitute approval, recommendation, or endorsement by the commissioner.
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- California Business and Professions Code sections 20000 through 20043 (the "Act") provide rights to you concerning termination, transfer or non-renewal of a franchise. If the Multi-Unit Master Franchise Agreement contains a provision that is inconsistent with the Act, the Act will control.
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- Section 31125 of the California Corporations Code requires the franchisor to give you a disclosure document, approved by the Department of Financial Protection and Innovation before a solicitation of a proposed material modification of an existing franchise.
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- The Multi-Unit Master Franchise Agreement provides for termination upon bankruptcy.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, California Business and Professions Code sections 20000 through 20043, also known as the "Act", provide specific rights to franchisees regarding the termination, transfer, or non-renewal of their franchise agreements. The FDD stipulates that if any provision within the Multi-Unit Master Franchise Agreement is inconsistent with the Act, the provisions of the Act will take precedence and govern the relationship. This ensures that California franchisees are afforded the full protections under California law, regardless of what the franchise agreement might state.
This protection is significant for prospective Bhc franchisees in California because it means certain franchisor-friendly clauses in the standard agreement may not be enforceable in California. For example, the agreement requires franchisees to execute a general release of claims upon transfer of the Multi-Unit Master Franchise Agreement. However, California Corporations Code section 31512 voids any waiver of rights under the Franchise Investment Law (Corporations Code §§31000-31516) or Business and Professions Code section 20010, which voids waivers of rights under the Franchise Relations Act (Business and Professions Code §§20000-20043).
Furthermore, the Bhc franchise agreement includes a covenant not to compete that extends beyond the termination of the franchise. The addendum clarifies that this provision may not be enforceable under California law, which generally disfavors such broad non-compete agreements. Similarly, while the agreement allows for termination upon bankruptcy, the addendum notes that this provision's enforceability may be limited by federal bankruptcy law (11 U.S.C.A. §101 et seq.).
In summary, while the Bhc franchise agreement is a legal document that governs the relationship between the franchisor and franchisee, California law provides additional protections to franchisees operating within the state. Prospective franchisees should carefully review both the franchise agreement and the relevant sections of the California Business and Professions Code to fully understand their rights and obligations.