Upon termination of the Bhc franchise agreement, what outstanding payments must the franchisee make to the Franchisor or its affiliates?

According to Bhc's 2025 Franchise Disclosure Document, if the franchise agreement is terminated, canceled, or expires, the franchisee is obligated to pay Bhc all outstanding royalties, fees, and any other amounts owed to Bhc or its affiliates. This includes any accounts payable under the franchise agreement or any other written or oral agreements, such as subleases and lease assignments, between the parties.

In practical terms, this means that upon termination, a Bhc franchisee must ensure that all financial obligations to Bhc are settled. This encompasses not only the standard royalty and advertising fees but also any outstanding balances related to supplies, equipment, or services provided by Bhc or its affiliates. The franchisee should review all agreements, including subleases or lease assignments, to identify any potential outstanding amounts.

This requirement protects Bhc by ensuring that all due payments are received before the franchisee ceases operations. For a prospective franchisee, it highlights the importance of maintaining accurate financial records and fulfilling all payment obligations throughout the term of the franchise agreement. Failure to do so could result in legal action and additional expenses upon termination.

It is also important to note that the franchisee is responsible for the removal of all Bhc signage and branding from the premises, as well as discontinuing any advertising that implies affiliation with Bhc. While the franchisee is responsible for the costs associated with these actions, failure to comply allows Bhc to take action to protect its brand and recover expenses from the franchisee.