Under what conditions can a Bhc franchisee transfer an interest in the Franchise Agreement, the Franchised BHC Restaurant, or equity interest in the franchisee's entity, requiring the franchisor's written consent?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise provided in this Agreement and subject to Franchisor's right of first refusal provided in section 12.3 hereof, Franchisee or an Principal Equity Operator may consummate any Transfer of a direct or indirect interest in this Agreement, the Franchised BHC Restaurant or the economic benefits derived therefrom, or any equity interest in Franchisee's franchised entity, not permitted by the preceding section 12.4, only after written notice to Franchisor and only with Franchisor's written consent, which will not be unreasonably withheld.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a franchisee needs the franchisor's written consent to transfer any interest in the Franchise Agreement, the Franchised Bhc Restaurant, or equity interest in the franchisee's entity. This requirement is in place unless the transfer is explicitly permitted under other sections of the agreement. Bhc will not unreasonably withhold consent for transfers that are not permitted under section 12.4, but are subject to Bhc's right of first refusal as detailed in section 12.3.
Before any transfer, the franchisee must provide written notice to Bhc, following the guidelines in section 16.1. This notice should include the proposed transferee's name and address, copies of all agreements related to the transfer, and the proposed transferee's application for approval, including financial disclosures and related information typically used by Bhc for new franchisees.
Bhc emphasizes that the Franchise Agreement is based on the unique skills and qualifications of the franchisee. Therefore, any attempt to transfer the franchise without Bhc's consent is considered a material breach of the agreement, potentially leading to immediate termination of the agreement and forfeiture of any rights under it. Furthermore, upon Bhc's approval of a transfer, the franchisee must ensure all accounts with Bhc are current and transfer all service agreements or contracts to the assignee. The franchisee must also execute an agreement among the franchisee, Bhc, and the assignee, including a mutual release, and assign the lease for the restaurant premises to the assignee.