What must accompany the monthly payments of Royalties to Bhc?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Franchise Royalty and Subfranchise Royalty are collectively referred to as "Royalties". Royalties are due and payable on a monthly basis on the following 5th day for the previous month (unless that day is a banking holiday, in which case the Royalties are due and payable on the next business day). Royalties will be calculated on the Gross Revenues received during the prior month. Monthly payments of Royalties are to be accompanied by a revenue report in the form prescribed by Franchisor.
- (d) Monthly payments of Royalties are to be accompanied by a revenue report in the form prescribed by Franchisor. Notwithstanding the preceding sentence, Franchisor reserves the right, upon ninety (90) days' written notice to Master Franchisee, to require Master Franchisee to pay the Royalty Fee on a more frequent basis, including monthly or weekly. In addition, upon ninety (90) days' written notice to Master Franchisee, Franchisor reserves the right to require Master Franchisee to sign electronic transfer of funds authorizations and other documents as Franchisor periodically designates or approves, to authorize Master Franchisee's bank to transfer, either electronically or through some other method of payment Franchisor or its Affiliates designate or approve, directly to Franchisor's or its Affiliates' account and to charge Master Franchisee's account all amounts due to Franchisor or its Affiliates from Master Franchisee. Master Franchisee's authorization will permit Franchisor or its Affiliates to designate the amount to be transferred from Master Franchisee's account. Master Franchisee must maintain a balance in its account sufficient to allow Franchisor and/or its Affiliates to collect the amounts owed when due. Master Franchise is responsible for any penalties, fines or other similar expenses associated with the transfer of funds described in this paragraph.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, monthly royalty payments must be accompanied by a revenue report. This report must be in the format that Bhc prescribes.
This requirement ensures that Bhc can accurately verify the gross revenues reported by the franchisee, which is the basis for calculating royalty fees. Franchisees should maintain detailed and accurate records of their gross revenues to facilitate the preparation of these reports. The specific format and content of the revenue report will be outlined by Bhc, so franchisees must adhere to these guidelines to avoid any discrepancies or issues with their royalty payments.
Bhc also retains the right to modify the payment schedule for royalties, potentially requiring payments more frequently than monthly, such as weekly. Bhc must provide Master Franchisees with ninety days' written notice before implementing such a change. Additionally, Bhc can mandate that Master Franchisees use electronic funds transfer authorizations for royalty payments, allowing Bhc to directly debit the franchisee's account for amounts due. Franchisees are responsible for maintaining sufficient funds in their account to cover these payments and for any associated penalties or fees.