Under what conditions can the Bhc Franchisor or Master Franchisee unilaterally terminate the agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and said business entity must be delivered to Franchisor before the effective date of the transfer. Master Franchisee will not be able to maintain direct ownership and operation of the BHC Restaurants which Master Franchisee (or its Affiliated Entities) has developed after such assignment.
13. DEFAULT AND TERMINATION
13.1 General.
(a) This Agreement may be terminated unilaterally by Franchisor or Master Franchisee only "for cause", which for purposes of this Agreement means a material violation of this Agreement and
includes any failure of a party to substantially comply with any obligation, duty or promise under this Agreement, including those acts or omissions specified in sections 13.2 and 13.3 hereof. If Franchisor is in material breach of this Agreement, Master Franchisee may terminate this Agreement by giving Franchisor prior written notice setting forth the asserted breach of this Agreement and giving Franchisor 30 days in which to cure the breach. If Master Franchisee is in material breach of this Agreement, Franchisor may exercise Franchisor's right to terminate this Agreement in accordance with this Article 13. If Franchisor becomes insolvent or declares bankruptcy, Master Franchisee will continue to have the right to operate under this Agreement until and unless a court issues an order otherwise. If because of the nature of the breach, it would be unreasonable for Franchisor to be able to cure the breach within 30 days, Franchisor will be given additional time (up to 30 additional days) as is reasonably necessary to cure said breach, upon condition that Franchisor must, upon receipt of such notice from Master Franchisee, immediately commence to cure such breach and continue to use best efforts to do so.
- (b) A "material breach" of this Agreement by Master Franchisee means any action or omission by Master Franchisee seriously impairing or adversely affecting the System, Franchisor or the relationship created by this Agreement, including but not limited to, an event described under 13.2(a) below.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, both the Franchisor and Master Franchisee can unilaterally terminate the agreement, but only 'for cause.' This 'cause' is defined as a material violation of the agreement, which includes failing to substantially comply with any obligation, duty, or promise outlined in the agreement.
Specifically, if Bhc is in material breach of the agreement, the Master Franchisee can terminate the agreement by providing prior written notice detailing the breach and allowing Bhc 30 days to rectify the situation. If the breach is such that it would be unreasonable to expect Bhc to cure it within 30 days, Bhc is granted additional time, up to 30 additional days, provided they immediately begin to address the breach and continue to exert their best efforts to resolve it.
Conversely, if the Master Franchisee materially breaches the agreement, Bhc can exercise its right to terminate the agreement. Additionally, if the Master Franchisee attempts to assign the franchise, all or substantially all of the BHC Restaurant's assets, or a controlling interest in the Master Franchisee (if an entity) in violation of the agreement's terms, it constitutes a material breach and can lead to immediate termination of the agreement without further notice. If Bhc becomes insolvent or declares bankruptcy, the Master Franchisee retains the right to operate under the agreement unless a court orders otherwise.