What must accompany the monthly payments of Royalties for Bhc franchises?
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 means that each month, in addition to paying the royalty fee, franchisees must also submit a detailed report outlining their gross revenues for the preceding month. This allows Bhc to verify the accuracy of royalty payments and track the financial performance of each franchise location.
Bhc also retains the right to modify the frequency of royalty payments for Master Franchisees, potentially requiring them to pay royalties more frequently (monthly or weekly) with 90 days written notice. Bhc can also require Master Franchisees to use electronic funds transfers for payments.
Prospective franchisees should carefully review the specific requirements for the revenue report and ensure they have systems in place to accurately track and report their gross revenues to Bhc on a monthly basis. Franchisees should also be aware of the potential for Bhc to change the payment schedule with proper notice.