Under what conditions can Bhc commence operating the franchised Bhc Restaurant on the franchisee's behalf after the death of an individual franchisee or Majority Equity Owner?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) In the event of an individual Franchisee's death or the death of a Majority Equity Owner, such person's interest in this Agreement or its equity interest in the franchise entity must Transfer as soon as practicable (but not more than 270 days) after the date of death in accordance with such person's will or, if such person dies without a will, in accordance with laws of intestacy governing the distribution of such person's estate, provided that adequate provision is made for the management of the Franchised Business.
If Franchisor determines (i) there is no imminent sale to a qualified successor or (ii) there is no heir or other Principal Equity Operator capable of operating the Franchise, Franchisor may (but is not obligated to) immediately commence operating the Franchised BHC Restaurant on Franchisee's behalf for a period of up to 90 days, renewable as Franchisor deems necessary for up to one year and Franchisor will periodically discuss the status with the heirs of the decedent.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, in the event of the death of an individual franchisee or a Majority Equity Owner, Bhc has the option to begin operating the franchised Bhc Restaurant under specific circumstances. This can occur if Bhc determines that there is no imminent sale to a qualified successor or if there is no heir or Principal Equity Operator capable of running the franchise.
Bhc's intervention is not obligatory; it is at their discretion. If Bhc chooses to operate the restaurant, it can do so for up to 90 days initially, with the possibility of renewals as deemed necessary by Bhc, up to a maximum of one year. During this period, Bhc will have discussions with the heirs of the deceased regarding the status of the franchise.
Furthermore, Bhc has the right to place an interim manager in the franchised Bhc Restaurant. In such cases, the franchisee (or the franchisee's estate) is responsible for covering the manager's salary, transportation, lodging, related living expenses, and a management administration fee of 15%. This arrangement ensures the continued operation of the Bhc Restaurant while the transfer of ownership or management is being resolved.