Under what circumstances can Bhc terminate the MFA agreement?

According to Bhc's 2025 Franchise Disclosure Document, Bhc can terminate the Master Franchise Agreement (MFA) under specific circumstances. Bhc may terminate the MFA if the franchisee: (i) fails to meet the Development Schedule; (ii) fails to comply with any other terms and conditions of the MFA; (iii) makes or attempts to make a transfer or assignment in violation of the MFA; or (iv) fails to comply with the terms and conditions of any individual MFA or of any other agreement to which you and we or our affiliates are parties.

These termination conditions are fairly standard in franchising. The development schedule is a critical component of the MFA, as it outlines the timeline for opening new Bhc restaurants within the designated development area. Failure to adhere to this schedule can hinder Bhc's growth plans and justify termination. Similarly, non-compliance with other terms and conditions of the MFA, such as operational standards or payment obligations, can also lead to termination.

Furthermore, any unauthorized transfer or assignment of the MFA, which could potentially introduce new, unapproved operators into the Bhc system, is grounds for termination. Finally, failure to comply with the terms of any agreement between the franchisee and Bhc or its affiliates, which could include franchise agreements for individual restaurants or other related contracts, can also result in the termination of the MFA. These conditions protect Bhc's brand, operational consistency, and financial interests, while also setting clear expectations for franchisees.