Under what circumstances will the covenants in the Bhc franchise agreement remain enforceable even after the agreement's expiration, termination, cancellation, or assignment?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
16.5 Survival of Covenants.
The covenants contained in this Agreement that by their terms require performance by the parties after the expiration, termination, cancellation, or assignment of this Agreement will be enforceable notwithstanding said expiration, termination, cancellation, or assignment.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the covenants within the franchise agreement that specifically require actions or performance by either party after the agreement's expiration, termination, cancellation, or assignment will remain enforceable. This means that certain obligations do not simply disappear when the franchise agreement ends.
For a prospective Bhc franchisee, this implies that you must understand which specific covenants extend beyond the term of the agreement. These could include non-compete clauses, confidentiality agreements, or obligations related to the use of Bhc's proprietary information. For instance, franchisees are prohibited from operating a competing business selling similar goods or services to Bhc Products within a 25-mile radius of their former territory for two years after termination, cancellation, or expiration of the franchise agreement. They must also refrain from using any of Bhc's proprietary information or trade secrets.
It is important for franchisees to carefully review the franchise agreement to identify all covenants that survive termination and to fully understand their responsibilities even after the franchise relationship ends. This ensures compliance and avoids potential legal issues with Bhc after the agreement is no longer in effect.