Are Affiliate Franchisees and Subfranchisees of a Bhc franchisee allowed to offer or sell unapproved products or services from their Bhc Restaurants?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
You must offer and sell all BHC Products and perform all services that we require for a BHC Restaurant. You may not offer or sell any products or perform any services that we have not authorized. We have the unlimited right to change the required and/or authorized products and services you may offer. You also may not offer for sale any BHC Products or other products through the Internet or other online programming or marketing. You are not otherwise limited in the customers to whom you may sell products or services.
In sum, you may purchase and otherwise use in the operation of your Master Franchise Business, only those products and services that we periodically require or approve, and you may not purchase, sell or use any unapproved products or services. In addition, you must ensure that your Affiliate Franchisee and your Subfranchisees offer and sell from their BHC Restaurants all of the products and services that we periodically require or approve, and ensure that they do not offer or sell from their BHC Restaurants any unapproved products or services. You also must ensure that your Affiliate Franchisee and your Subfranchisees do not use the premises of their BHC Restaurants for any purpose other than the operation of a BHC Restaurant. We have the unlimited right to change the System and other items, equipment and related accessories and other products and services you, your Affiliate Franchisee and your Subfranchisee may purchase, and otherwise use in the operation of your Master Franchise Business, and your Affiliate Franchisee and your Subfranchisees may offer and sell from or use at their BHC Restaurants.
You also may not offer for sale, and must ensure that your Affiliate Franchisee and your Subfranchisees do not offer for sale, any Supplies, including the Products, through any other channels of distribution, including grocery and convenience BHC Restaurants and other retail BHC Restaurants and locations, the Internet (or any other existing or future form of electronic commerce), and other types of resale, wholesale and distribution arrangements, without our prior written consent. Except as described above, you are not otherwise limited in the customers to whom you, your Franchisee, and your Subfranchisees may offer and sell products or services.
Source: Item 16 — Restrictions on What the Franchisee May Sell (FDD page 43)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a franchisee, their Affiliate Franchisee, and Subfranchisees are explicitly restricted from offering or selling any products or services that have not been authorized by Bhc. Bhc retains the right to modify the required and authorized products and services that franchisees may offer. Furthermore, franchisees must ensure that their Affiliate Franchisees and Subfranchisees offer and sell only approved products and services from their Bhc Restaurants and do not use the premises for any purpose other than operating a Bhc Restaurant.
This restriction extends to all channels of distribution, including online sales. Franchisees must ensure that their Affiliate Franchisees and Subfranchisees do not offer for sale any supplies, including products, through other channels of distribution like grocery and convenience stores, the internet, or other resale arrangements, without prior written consent from Bhc. The purpose of this policy is to maintain a uniform image and quality of products and services throughout the Bhc system.
To ensure consistency, franchisees, their Affiliate Franchisees, and Subfranchisees must adhere to Bhc's standards, operating procedures, specifications, and rules, including those related to ingredients, brand names, preparation, and presentation. All products offered at a Master Franchised Bhc Restaurant, including those bearing Bhc's trademarks, must be purchased exclusively from Bhc or its designated suppliers. This includes ancillary products like books, specialty foods, hats, and t-shirts, which Bhc may periodically specify for sale.
If a franchisee, Affiliate Franchisee, or Subfranchisee wishes to use any product, supply, material, furnishing, or equipment not yet approved by Bhc, they must notify Bhc in writing and submit sufficient information and samples for evaluation. Bhc will then provide written approval or disapproval within a reasonable time period, typically 30 days. The approval depends on factors such as product quality, delivery reliability, service standards, and the supplier's willingness to meet Bhc's criteria.