What rights does Bhc have as a third-party beneficiary of the agreement with the General Manager?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Your General Manager need not have an equity interest in the business but must agree in writing not to compete against us and to preserve confidential information to which they have access and not to compete with you, us, and other franchisees. We may regulate the form of agreement that you use and be a third-party beneficiary of that agreement with independent enforcement rights.
Source: Item 15 — Obligation to Participate in The Actual Operation of The Franchise Business (FDD pages 42–43)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc may regulate the form of the agreement between the franchisee and the General Manager. Bhc also has independent enforcement rights as a third-party beneficiary of that agreement.
This means that Bhc has the right to ensure the General Manager adheres to the terms of the agreement, particularly regarding non-competition and the preservation of confidential information. Bhc can take direct action to enforce these provisions, even though they are not a direct party to the agreement between the franchisee and the General Manager.
For a prospective franchisee, this highlights the importance of selecting a General Manager who will comply with Bhc's standards and protect Bhc's interests. The franchisee should understand that Bhc has the power to enforce the agreement with the General Manager independently, adding another layer of oversight to the operation of the franchise.