What is the definition of an 'Affiliate Franchisee' in relation to a Bhc Master Franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
An "Affiliate Franchisee" means in relation to a Master Franchisee, any person controlling, controlled by or under common control with Master Franchisee, either directly or indirectly through one or more intermediaries.
In addition, Master Franchisee must establish and operate at least one (1) Affiliate Franchised BHC Restaurants within the Development Area pursuant to separate Subfranchise Agreements before Master Franchisee may grant subfranchises to third parties for the establishment and operation of Subfranchised BHC Restaurants within the Development Area.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, an 'Affiliate Franchisee' is defined in relation to a Master Franchisee as any person or entity that controls, is controlled by, or is under common control with the Master Franchisee. This control can be direct or indirect, through one or more intermediaries.
In simpler terms, an Affiliate Franchisee is essentially a related party to the Master Franchisee, where there is a relationship of control. This definition is important because the Master Franchisee may operate Bhc restaurants through such affiliates, subject to certain conditions and approvals by Bhc.
Specifically, the Master Franchisee must first establish and operate at least one Affiliate Franchised Bhc Restaurant within the designated Development Area before they are allowed to grant subfranchises to third parties. This requirement ensures that the Master Franchisee has practical experience with the Bhc system before licensing it to others. The FDD also states that prior to appointing any subfranchisee, including an affiliate of the Master Franchisee, the Master Franchisee must conduct an approval process to confirm that each potential subfranchisee meets all of Bhc's minimum requirements for new subfranchisees.