Under the Bhc Guarantee of Franchise Agreement, who is considered a 'Principal Equity Operator'?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchise Agreement
Exhibit 4 – Confidentiality and Non-Competition Agreement
Exhibit 5 –Addendum to Lease
TERRITORY AND LOCATION OF FRANCHISED BHC RESTAURANT
| Credit References (e.g., Bank, Suppliers, Accountant) | Personal References (Someone who has known you for at least 2 years) |
|---|---|
| 1. | 1. |
| 2. | 2. |
| Bank Details | |
| Bank Name: | |
| Account Number: | |
| Address: | |
| Phone: |
NAMES AND ADDRESSES OF PRINCIPAL EQUITY OPERATORS
If Franchisee is an entity, list below the names, residential addresses, and respective percentage equity ownership interests of each Principal Equity Operator:
GUARANTEE OF FRANCHISE AGREEMENT
| dated | between BHC USA LLC |
|---|---|
| ("Franchisor") and | |
| ("Franchisee") and for other good and valuable consideration, each of the undersigned "Principal Equity | |
| Operators" (as defined in the Franchise Agreement), and their spouses (if applicable), for themselves, | |
| their heirs, successors, and assigns, do jointly, individually and severally hereby absolutely and | |
| unconditionally guarantee the payment of all amounts and the performance of all of the covenants, terms, | |
| conditions, agreements and undertakings contained and set forth in said Franchise Agreement and in any | |
| other agreement(s) by and between Franchisee and Franchisor. |
If more than one person has executed this Guarantee of Franchise Agreement ("Guarantee"), the term "the undersigned", as used herein, refers to each such person, and the liability of each of the undersigned hereunder will be joint and several and primary as sureties.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a 'Principal Equity Operator' is defined within the context of the Franchise Agreement and the Guarantee of Franchise Agreement. Specifically, Bhc is executing the agreement with the understanding that the Principal Equity Operators and other individuals listed in Exhibit 2 are the sole holders of legal or beneficial interest in the franchisee. Each Principal Equity Operator, along with their spouses if applicable, is required to execute the Guarantee of Franchise Agreement, which is attached as Exhibit 3 to the Franchise Agreement.
This means that Bhc places significant importance on identifying and involving those individuals who have a substantial ownership stake in the franchise entity. By requiring these individuals to sign a guarantee, Bhc aims to ensure that they are personally committed to the performance of the franchise agreement. This is a common practice in franchising, as it provides the franchisor with an additional layer of security and accountability.
Furthermore, Bhc retains the right to use the name, image, and likeness of all Principal Equity Operators for commercial purposes related to marketing and promotion. This extends to the use of the Bhc brand, intellectual property, products, and business locations. This clause remains in effect even after the termination or expiration of the franchise agreement. At least one Principal Equity Operator, along with the General Manager, must participate personally in the direct operation of the Franchised Bhc Restaurant.
For a prospective franchisee, this definition highlights the importance of clearly identifying all individuals with significant equity in the franchise and understanding their obligations under the Guarantee of Franchise Agreement. It also underscores the need to be aware of Bhc's rights regarding the use of their personal information for marketing purposes. Franchisees should carefully review Exhibit 2 and Exhibit 3 of the Franchise Agreement to fully understand the implications of being a Principal Equity Operator.