What constitutes the 'Opening Date' for a Bhc restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ty" of 4.5% of Franchisee's Gross Revenues.
- (b) 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.
4.4 Marketing, Advertising and Promotion.
- (a) Beginning on the Opening Date, Franchisee must pay Franchisor a "Marketing and Promotion Fee" of 2.5 of Franchisee's Gross Revenues. However, Franchisor is not requiring this contribution at this time because Franchisor does not anticipate brand marketing until Franchisor has at least 50 Franchised BHC Restaurants in operation. If established, this fee is due and payable at the same time and in the same manner as Royalty Fee. Franchisor reserves the right to require payment of this fee once Franchisor has more than 50 Franchised BHC Restaurants in operation. Once BHC starts to require payment, Marketing and Promotion Fees collected from BHC franchisees less a 15% administration fee will be spent for national and regional advertising and promotional campaigns designed to promote and enhance the value of the BHC trademarks and their general public recognition and acceptance.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the 'Opening Date' is a critical point for several obligations. Beginning on the Opening Date, the franchisee must pay a Marketing and Promotion Fee of 2.5% of Gross Revenues, although this fee is currently waived until Bhc has at least 50 restaurants in operation. Additionally, within 60 days after the Opening Date, the franchisee is required to spend between $10,000 and $13,000 on an initial grand opening advertising and promotion event, including a "soft opening" around the Opening Date and a grand opening event.
The franchisee must also provide Bhc with a report itemizing expenditures on grand opening advertising and promotion within 75 days after the Opening Date. Furthermore, commencing with the third full calendar month after the Opening Date, the franchisee must spend at least 1% of annual Gross Revenues on local marketing, advertising, and promotion.
These obligations highlight the importance of accurately determining the Opening Date, as it triggers significant financial and reporting responsibilities for the franchisee. The FDD does not explicitly define what constitutes the 'Opening Date,' but it is implied to be the date when the restaurant begins serving customers, as it is tied to revenue generation and promotional activities.
Prospective franchisees should seek clarification from Bhc on the precise definition of 'Opening Date' to ensure compliance with all obligations and avoid potential disputes.