What are considered 'Captive locations' where the Franchisor can develop or franchise Bhc restaurants, even within the Master Franchisee's Development Area?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) So long as Master Franchisee's obligations under the Development Schedule are being met on a timely basis and until this Agreement terminates, Franchisor will not itself operate a BHC Restaurant within the Development Area, nor allow any of its affiliates or other BHC franchisees to do so. Captive locations will be excluded from Master Franchisee's Development Area and Franchisor has the right to develop or franchise the following Captive location locations: (1) military bases; (2) public transportation facilities; (3) sports facilities, including race tracks; (4) student unions or other similar buildings on college or university campuses; (5) amusement and theme parks; (6) malls; (7) special events; (8) hospitals; (9) hotel, resort, or other lodging facility; (10) state or national parks; (11) exhibition hall; conference facility or convention center; (12) casino or gambling establishment; (13) esports events and venues; (14) street fairs; (15) delivery facilities (e.g.,, ghost kitchens) or (16) any similar area to the sites referenced herein n (collectively, "Captive locations"). Franchisor may not alter the Development
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, certain locations are designated as "Captive locations," where Bhc retains the right to develop or franchise restaurants, even within a Master Franchisee's designated Development Area. This means that while a Master Franchisee typically has exclusive rights to develop Bhc restaurants within their area, these specific locations are carved out as exceptions.
The FDD lists the following as Captive locations: military bases, public transportation facilities, sports facilities (including race tracks), student unions or similar buildings on college or university campuses, amusement and theme parks, malls, special events, hospitals, hotels/resorts/lodging facilities, state or national parks, exhibition halls/conference facilities/convention centers, casinos or gambling establishments, esports events and venues, street fairs, delivery facilities (e.g., ghost kitchens), or any similar area to the sites referenced.
This provision has significant implications for potential Master Franchisees. It means that Bhc can directly compete with its own franchisees within their territory in these Captive Locations. A prospective franchisee should carefully evaluate the presence and potential for such locations within their Development Area to assess the potential impact on their business. Understanding the prevalence of these locations and Bhc's intentions for developing them is crucial for making an informed investment decision.