While the Bhc Franchise Agreement is in effect, can a member of the franchisee's immediate family participate in a Competitive Business without the Franchisor's written consent?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) While the Franchise Agreement is in effect, neither the undersigned, nor any member of his or her immediate family, shall engage in, or participate as an owner, officer, partner, director, agent, employee, shareholder or otherwise in any other Competitive Business without having first obtained the Franchisor's written consent. For the purposes of this Agreement,
- (9) The undersigned has acquired from the Franchisor confidential information regarding Franchisor's trade secrets and franchised methods which, in the event of a termination of the Franchise Agreement, could be used to injure the Franchisor. As a result, neither the undersigned, nor any member of his or her immediate family, shall, for a period of two (2) years from the date of termination, transfer or expiration of the Franchise Agreement, without having first obtained the Franchisor's written consent, engage in or participate as an owner, officer, partner, director, agent, employee, shareholder or otherwise in any Competitive Business which is located or operating, as of the date of such termination, transfer or
expiration, within a 25-mile radius of the Franchisee's former Franchised Location as defined in the Franchise Agreement, or within a 10-mile radius of any other franchised or company-owned Franchised BHC Restaurant, unless such right is granted pursuant to a separate agreement with the Franchisor.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, while the Franchise Agreement is in effect, neither the franchisee nor any member of their immediate family can engage in or participate in any Competitive Business without obtaining Bhc's prior written consent. This includes involvement as an owner, officer, partner, director, agent, employee, or shareholder. This restriction is in place to protect Bhc's interests and prevent conflicts of interest during the term of the franchise agreement.
This provision means that a franchisee's spouse, children, or other immediate family members cannot operate or be involved in a competing business while the franchise agreement is active, unless they receive explicit written permission from Bhc. This is a fairly standard clause in franchise agreements, designed to ensure the franchisee's full dedication to the Bhc franchise and to prevent the sharing of confidential information or business strategies with competitors.
After the termination or expiration of the Franchise Agreement, a similar restriction applies for a period of two years. During this time, neither the franchisee nor their immediate family can engage in a Competitive Business within a 25-mile radius of the former franchised location or within a 10-mile radius of any other franchised or company-owned Bhc restaurant, without prior written consent from Bhc. This extended restriction further protects Bhc's market and proprietary information even after the franchise relationship ends. A prospective franchisee should carefully consider these limitations and discuss any potential conflicts with family business interests with Bhc before signing the Franchise Agreement.