What rights must a Bhc Master Franchisee ensure are included in any lease agreement a Subfranchisee enters into with a landlord?

According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee has specific obligations regarding the lease agreements of their Subfranchisees. The Master Franchisee must ensure that each Subfranchisee includes express provisions in their lease agreement with the landlord for a Bhc Restaurant.

These provisions must grant the Master Franchisee three key rights. First, the right to receive notice of any breach of the lease agreement. Second, the right, but not the obligation, to cure any such breach. Third, the right, but not the obligation, to have the lease agreement transferred, assigned, or novated to the Master Franchisee. This transfer can occur upon a breach of the lease agreement or the expiration or termination of the Subfranchise Agreement.

These requirements protect the Master Franchisee's investment and operational control. By receiving notice of breaches, the Master Franchisee can intervene to protect the brand and the business. The option to cure breaches allows the Master Franchisee to stabilize the location and prevent disruptions. The right to assume the lease ensures the Master Franchisee can maintain control of the location if the Subfranchisee defaults or the agreement ends. This is a common practice in franchising, as it protects the franchisor's and master franchisee's interests in maintaining a presence in a specific location.