What are the two options for the renewal agreement between Bhc and the Master Franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) As a condition to renewing Master Franchisee's rights, duties and obligations hereunder, not later than 90 days before the end of the term that is expiring, Master Franchisee and Franchisor must sign either (i) Franchisor's then-current standard Franchise Agreement modified by addendum to remove provisions that only apply to a new Master Franchisee, such as initial franchise fee and initial training requirements ("Renewal Franchise Agreement") or (ii) an addendum to this Agreement extending its term for an additional 10 year term.
IN ADDITION TO NOT GRANTING ANY ADDITIONAL RIGHTS BEYOND THOSE GRANTED IN THIS AGREEMENT, THE RENEWAL FRANCHISE AGREEMENT MAY CONTAIN OTHER TERMS THAT ARE SUBSTANTIALLY DIFFERENT FROM THOSE IN THIS AGREEMENT.
The Renewal Franchise Agreement, when executed, will supersede this Agreement.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, as a condition to renewing the Master Franchisee's rights, duties, and obligations, Bhc and the Master Franchisee must sign one of two agreements no later than 90 days before the end of the current term. The first option is Bhc's then-current standard Franchise Agreement, modified by an addendum to remove provisions that apply only to new Master Franchisees, such as the initial franchise fee and initial training requirements. This modified agreement is referred to as the "Renewal Franchise Agreement."
The second option is an addendum to the existing agreement, extending its term for an additional 10-year period. The Renewal Franchise Agreement may contain terms that are substantially different from those in the original agreement, but it will not grant any additional rights beyond those already granted. Once executed, the Renewal Franchise Agreement will supersede the original agreement.
It is important for prospective Bhc franchisees to understand that the terms of the renewal agreement can differ significantly from the original agreement. Franchisees should carefully review the renewal agreement and seek legal counsel to understand the implications of any changes. Additionally, franchisees must ensure they meet all obligations, including monetary and material obligations, and may need to remodel their BHC Restaurant to meet current standards as a condition of renewal.