What defines a 'Subfranchised Bhc Restaurant'?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Master Franchisee desires to obtain the rights to establish and operate, through an affiliate of Master Franchisee ("Affiliate Franchisee"), multiple BHC restaurants in the Development Area, as described in Schedule "1" hereto, under the System and Marks ("Affiliate Franchised BHC Restaurants") and to license affiliated and unaffiliated third parties ("Subfranchisees") to establish and operate restaurants in the Development Area under the System and Marks ("Subfranchised BHC Restaurants"). The Affiliate Franchised BHC Restaurants and**/or** Subfranchised BHC Restaurants shall be referred to collectively in the Agreement as "BHC Restaurants".
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a 'Subfranchised Bhc Restaurant' refers to a restaurant established and operated by affiliated and unaffiliated third parties ('Subfranchisees') within a Development Area under the BHC System and Marks. The Master Franchisee obtains the rights to license these subfranchisees to operate restaurants under the Bhc system.
Before appointing any subfranchisee, the Master Franchisee must conduct an approval process to ensure that each potential subfranchisee and restaurant meets Bhc's minimum requirements. Bhc also reserves the right to approve potential subfranchisees and restaurant locations. The Master Franchisee cannot directly operate Bhc restaurants, but can do so through an Affiliate Franchisee that enters into a Subfranchise Agreement with the Master Franchisee.
Before a Master Franchisee can grant subfranchises to third parties, they must first establish and operate at least one Affiliate Franchised Bhc Restaurant within the Development Area, pursuant to separate Subfranchise Agreements. The Master Franchisee must use a Subfranchise FDD to offer and sell subfranchises for Bhc Restaurants to prospective subfranchisees, and this document must comply with all Franchise Laws. Master Franchisees must also register the Subfranchise FDD with the states, provide it to prospective subfranchisees, and comply with all applicable waiting periods before receiving any consideration or signing any binding agreements.