Does Bhc or its affiliates have the right to receive payments from suppliers based on franchisee purchases?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (o) Franchisor and Franchisor's affiliates have the right to receive payments, rebates, and other forms of consideration from suppliers based upon Franchisee's (and other franchisees') purchases of goods, products, and services as described in this section, as well as in connection with any future purchases of any goods, products, and services.
Most of these payments are calculated as an amount based on products sold to Franchisee and Franchisor affiliate-owned Franchised BHC Restaurants.
Franchisor will retain and use such payments as we deem appropriate or as required by the vendor or by manufacturers.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc and its affiliates do have the right to receive payments from suppliers based on franchisee purchases. These payments can take the form of payments, rebates, and other considerations. These apply to purchases of goods, products, and services.
Most of these payments are calculated based on products sold to both franchisees and Bhc affiliate-owned franchised restaurants. Bhc retains the right to use these payments as they see fit or as required by the vendor or manufacturer.
This arrangement is common in franchising, where the franchisor leverages the collective buying power of the franchise system to negotiate favorable terms with suppliers. While this can benefit the system as a whole, it's important for prospective franchisees to understand that Bhc has discretion over how these payments are used. Franchisees should inquire about the specific types of payments received and how they benefit the overall franchise system.