What is the significance of being named a 'Specially Designated National' or 'Blocked Person' for a Bhc franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
A. The Prospective Franchisee represents, warrants and covenants to BHC USA LLC ("BHC") that all of the following matters are true and accurate as of the date of execution of this Acknowledgment and Authorization for Background Check ("Acknowledgment"):
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- No Prospective Franchisee and his/her/its Affiliates (as that term is defined below) had or has any relationship, affiliation, or ownership interest, directly or indirectly, with BHC USA or its Affiliates ("Prohibited Persons"). "Affiliates" mean a party's respective present and former, direct and indirect, parents, subsidiaries, employees, officers, directors, shareholders, managers, members, agents, representatives, and spouses (for individuals), including any other person directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such person. "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
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The Prospective Franchisee has not made nor is making any act of providing money, goods, gifts, entertainment or other monetary or non-monetary benefits to any of the Prohibited Persons (including, but not limited to, the provision of rebates/back margins, granting of an opportunity to acquire intermediate margin, lending of money, reduction of debt, provision of collateral, provision of transaction/investment opportunities, job placement, high-price purchase/lowprice sale, etc.).
The Prohibited Persons shall not hold any interest in the Prospective Franchisee nor have any management right, other substantial control, and/or claim against the Prospective Franchisee.
In addition, if the Prohibited Persons have any right or legal relationship with the Prospective Franchisee, claim/debt, employment, delegation, or other right or legal relationship, regardless of whether real name/borrowed name or registered/non-registered, the Prospective Franchisee shall immediately notify BHC in writing.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
I am unable to provide information about the significance of being named a 'Specially Designated National' or 'Blocked Person' for a Bhc franchisee, according to the 2025 Franchise Disclosure Document. While the document includes an acknowledgement section where the prospective franchisee represents and warrants certain conditions, it does not specifically address the implications of being designated as a 'Specially Designated National' or 'Blocked Person'.
However, the acknowledgement section does state that the prospective franchisee must disclose any relationship, affiliation, or ownership interest with BHC USA or its affiliates, and that prohibited persons shall not hold any interest in the prospective franchisee nor have any management right, other substantial control, and/or claim against the prospective franchisee. This suggests that BHC is concerned about potential conflicts of interest or undue influence from individuals or entities associated with the company.
To fully understand the implications of being named a 'Specially Designated National' or 'Blocked Person' for a Bhc franchisee, a prospective franchisee should directly ask the franchisor about this topic. Specifically, they should inquire about the franchisor's policies and procedures for screening potential franchisees and their affiliates, as well as the consequences of being placed on such a list after the franchise agreement has been signed.