What is assumed regarding payments made to you or your affiliates by the Affiliate Franchisee for a Bhc restaurant?

According to Bhc's 2025 Franchise Disclosure Document, when an Affiliate Franchisee makes payments to the Master Franchisee or their affiliates, it is assumed that these payments are non-refundable. This assumption is made when estimating the initial investment required to establish and operate the first Affiliate Franchised Bhc Restaurant under the Master Franchise Agreement (MFA).

This assumption impacts prospective Master Franchisees because it means they should not expect to refund any fees collected from their Affiliate Franchisees, which could affect their financial planning and relationships with their sub-franchisees. The document also clarifies that whether payments made to third parties are refundable depends on the specific arrangements the Affiliate Franchisee makes with those third parties, and that neither the Master Franchisee nor their affiliates are assumed to offer any direct or indirect financing to the Affiliate Franchisee.

Prospective Master Franchisees should carefully consider the implications of this non-refundability assumption and ensure they have a clear understanding of their financial obligations and the terms of their agreements with Affiliate Franchisees and third-party suppliers. This is a fairly standard practice in franchising, as initial fees and payments are generally intended to cover the costs associated with setting up the franchise and providing initial support and training.