During the term of the Master Franchise Agreement for Bhc, can the franchisee's immediate family participate in a Competitive Business without the Franchisor's consent?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) While the Master Franchise Agreement is in effect, neither the undersigned, nor any member of his or her immediate family, shall engage in, or participate as an owner, officer, partner, director, agent, employee, shareholder or otherwise in any other Competitive Business without having first obtained the Franchisor's written consent. For the purposes of this Agreement,
- (4) The undersigned has acquired from the Franchisor confidential information regarding Franchisor's trade secrets and franchised methods which, in the event of a termination of the Franchise Agreement, could be used to injure the Franchisor. As a result, neither the undersigned, nor any member of his or her immediate family, shall, for a period of two (2) years from the date of termination, transfer or expiration of the Master Franchise Agreement, without having first obtained the Franchisor's written consent, engage in or participate as an owner, officer, partner, director, agent, employee, shareholder or otherwise in any Competitive Business which is located or operating, as of the date of such termination,
transfer or expiration, within a 25-mile radius of the Master Franchisee's former Franchised Location as defined in the Master Franchise Agreement, or within a 10-mile radius of any other franchised or company-owned BHC Restaurant, unless such right is granted pursuant to a separate agreement with the Franchisor.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, during the term of the Master Franchise Agreement, neither the franchisee nor any member of their immediate family can engage in or participate in a Competitive Business without first obtaining the franchisor's written consent. This restriction applies to involvement as an owner, officer, partner, director, agent, employee, shareholder, or in any other capacity.
This clause ensures that the franchisee and their close family members are fully committed to the success of the Bhc franchise and do not divert their efforts or resources to competing ventures. Obtaining written consent from Bhc is mandatory before engaging in any Competitive Business, giving Bhc control over potential conflicts of interest.
After the Master Franchise Agreement terminates or expires, a similar restriction applies for two years. During this period, neither the franchisee nor their immediate family can participate in a Competitive Business without written consent from Bhc if the business is located within a 25-mile radius of the former franchised location or within a 10-mile radius of any other franchised or company-owned Bhc Restaurant. This extended restriction aims to protect Bhc's market share and proprietary information even after the franchise agreement ends.
These non-compete covenants are common in franchising to protect the brand and prevent franchisees from using the franchisor's knowledge and resources to benefit a competing business, ensuring the franchisee's focus remains on growing the Bhc business during and for a period after the franchise term.