What rights does the Franchisor have regarding the lease for the relocated Bhc Restaurant premises?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
8.6 Relocation of Franchisee's Franchised BHC Restaurant.
- (a) If Franchisee desires to relocate the Franchised BHC Restaurant, Franchisee may do so provided that not less than 90 days prior to the desired date of relocation (unless prior notice is impractical because of a required relocation in which event notice must be given as soon as possible), Franchisee makes a written request for consent to relocate, describing the reasons for the relocation and providing complete written details respecting any proposed new location.
- (b) Within 20 business days after receiving Franchisee's request, Franchisor will either approve or disapprove in writing such closure or relocation. If Franchisor disapproves a proposed relocation, Franchisee may request an alternative proposed new location for Franchisee's Franchised BHC Restaurant pursuant to the provisions of this section 8.6. Notwithstanding the foregoing, Franchisee shall be deemed to be in material default if Franchisee fails to open the Franchised BHC Restaurant at the new location within closure of the Franchised BHC Restaurant at the prior location.
- (c) Franchisee and the landlord may be required to execute a rider to Franchisee's lease for the new location for the Franchised BHC Restaurant (or other agreement or written understanding) that (i) grants Franchisor an option to assume Franchisee's position as lessee under the lease for the relocated Franchised BHC Restaurant premises if Franchisee is in material breach of either the lease for the relocated Franchised BHC Restaurant premises (including an obligation of the landlord to notify Franchisor if Franchisee is in such breach) or this Agreement, (ii) grants Franchisor the right to assign the lease to a bona fide franchisee of the System after assuming the lease and (iii) requires the landlord to fully cooperate with Franchisor in completing de-identification of the relocated Franchised BHC Restaurant in the event this Agreement is terminated or expires without being renewed and Franchisor does not exercise its option to assume the lease for the relocated Franchised BHC Restaurant premises.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, both franchisees and master franchisees who wish to relocate their Bhc restaurant must request consent in writing from Bhc at least 90 days before the desired relocation date. This request must detail the reasons for relocation and provide complete information about the proposed new location. Bhc has 20 business days to approve or disapprove the relocation in writing. If Bhc disapproves, the franchisee or master franchisee can propose an alternative location.
Bhc requires that franchisees and their landlords execute a rider to the lease for the new location. This rider grants Bhc several key rights. First, Bhc has the option to assume the franchisee's position as lessee if the franchisee materially breaches the lease or the Franchise Agreement. The landlord is obligated to notify Bhc of any such breach. Second, Bhc can assign the lease to another qualified Bhc franchisee after assuming it. Finally, the landlord must cooperate with Bhc to de-identify the premises as a Bhc restaurant if the Franchise Agreement terminates or expires without renewal, and Bhc chooses not to assume the lease.
These lease provisions ensure that Bhc maintains control over the restaurant locations and can protect its brand identity even if a franchisee defaults or leaves the system. The addendum to the lease acknowledges that the lease provisions are required by the Franchise Agreement and that the tenant is not an agent or employee of Bhc, clarifying that the landlord has no claims against Bhc unless Bhc assumes the lease. All notices to Bhc regarding the addendum must be in writing and sent via registered or certified mail to Bhc's designated address.