What constitutes the 'Opening Date' for a Subfranchised Bhc Restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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. We need not ensure that any particular franchisee benefits directly or proportionately from the Marketing and Promotion Fee.
- (b) When applicable, Marketing and Promotion Fees are due and payable on a monthly basis on the 14th of each month (unless that day is a banking holiday, in which case the Marketing and Promotion Fees are due and payable on the next business day). Marketing and Promotion Fees will be calculated on the Gross Revenues received during the monthly periods ending on the last day of each month.
- (c) During the 60 days after the Opening Date, Franchisee must spend in Franchisee's Territory at least $10,000 to $13,000 on the initial opening advertising and promotion event of Franchisee's Franchised BHC Restaurant, using the grand opening advertising and promotional program that Franchisor approves, including the "soft opening" to be held on or about the Opening Date and the grand opening event. Not later than 75 days after the Opening Date, Franchisee must provide Franchisor with a report itemizing Franchisee's expenditures on the grand opening advertising and promotion of Franchisee's Franchised BHC Restaurant. If you fail to meet the initial opening advertising and promotion, you will be required to add the shortage toward the Marketing and Promotion Fee.
- (d) Commencing with the third full calendar month after the Opening Date, Franchisee must (i) spend at least 1% of Franchisee's annual (January 1 through December 31) Gross Revenues on the local marketing, advertising, and promotion of Franchisee's Franchised BHC Restaurant, using marketing and promotional materials pre-approved or otherwise authorized in writing by Franchisor ("Local Advertising"). Franchisee must submit to Franchisor a Local Advertising plan which details the Local Advertising for the next 12-month period for Franchisor's approval.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
The 2025 Bhc Franchise Disclosure Document refers to the 'Opening Date' in several contexts, primarily related to financial obligations and operational requirements for franchisees. However, the document does not explicitly define what constitutes the 'Opening Date' for a subfranchised Bhc restaurant.
Based on the excerpts, the 'Opening Date' triggers several important deadlines and responsibilities for Bhc franchisees. For instance, franchisees must begin paying a Marketing and Promotion Fee starting on the Opening Date, although this fee is currently waived until Bhc has at least 50 restaurants in operation. Franchisees are also required to spend between $10,000 and $13,000 on initial advertising and promotion within 60 days after the Opening Date, including a "soft opening" around that date and a grand opening event. A report itemizing these expenditures must be submitted to Bhc within 75 days of the Opening Date.
Additionally, commencing three months after the Opening Date, franchisees must spend at least 1% of their annual gross revenues on local marketing and advertising, with plans submitted for Bhc's approval. The Opening Date also marks the start of the period for calculating monthly royalty payments, which are accompanied by a revenue report. Before the Franchised Bhc Restaurant opens to retail customers and before final inspections by any governmental agency, Bhc will visit the site of Franchised Bhc Restaurant for three (3) on-site visits and complete a final "walk through" inspection of the Franchised Bhc Restaurant and issue a written consent to open.
Given the financial and operational significance of the 'Opening Date,' prospective Bhc franchisees should seek a precise definition from the franchisor to ensure full compliance with all obligations and deadlines. Clarification should be sought regarding what specific event or milestone marks the official 'Opening Date,' such as the first day of business, a grand opening event, or another defined point in time.