What costs are the Bhc Master Franchisee responsible for regarding the Franchisor's site visits?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ion of the BHC Restaurant and issue a written consent to open. Any deficiencies noted by Franchisor as a result of this inspection must be corrected by Master Franchisee within 30 days or this Agreement may be terminated without any liability to Franchisor. Master Franchisee shall be responsible for such inspection fee of USD$600, all accommodation, transportation, meals, daily allowances, and other costs and expenses for the Franchisor's personnel in connection with such visits on site but up to three times per Franchised BHC Restaurant
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee is responsible for specific costs associated with the Franchisor's site visits to the Franchised BHC Restaurant. These costs include a $600 inspection fee, as well as all accommodation, transportation, meals, daily allowances, and other expenses incurred by the Franchisor's personnel during these visits. However, this responsibility is limited to a maximum of three visits per Franchised BHC Restaurant.
This means that for each of the first three site visits to a restaurant location, the Master Franchisee must cover the travel and lodging expenses of the Bhc personnel conducting the inspection, in addition to the flat $600 fee. This could potentially represent a significant expense, especially if the Franchisor's personnel need to travel a long distance or stay for an extended period. It is important to note that this obligation applies to each individual restaurant location, so a Master Franchisee with multiple locations would incur these costs for each restaurant.
Beyond the initial three visits, the Master Franchisee is not explicitly responsible for these costs, although the document does state that the Franchisor's representatives may re-inspect the restaurant to ensure deficiencies have been corrected, and that the Master Franchisee is responsible for all associated costs and expenses for the Franchisor's personnel in connection with such re-inspections. This implies that the Master Franchisee could incur additional expenses if the restaurant fails initial inspections and requires follow-up visits. A prospective franchisee should clarify with Bhc the potential frequency and scope of these re-inspections and associated costs.
In summary, the Master Franchisee should budget for these inspection-related costs, particularly during the initial opening phase of each restaurant. Understanding the potential for additional expenses related to re-inspections is also crucial for financial planning. This is a fairly standard practice in franchising, where franchisees typically bear the costs associated with ensuring compliance and maintaining brand standards.