What is the definition of 'Approved Supplies List' for a Bhc franchise?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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Approved Suppliers and Approval of Alternative Suppliers
We provide you with a list of approved manufacturers, suppliers, and distributors ("Approved Suppliers List") and approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies and other items or services necessary to operate the Master Franchised BHC Restaurant ("Approved Supplies List"). The Approved Supplies List may specify a required manufacturer or supplier of a specific product or piece of equipment. We reserve the right to designate a required source of supply for certain products and supplies, and we or an affiliate may be a required source. The lists also may include other specific products without reference to a particular manufacturer or supplier, or they may set forth the specifications and/or standards for other approved products. A copy of the current list of Approved Supplies List is attached as Exhibit H. The Approved Suppliers and Approved Supplies List are not specific to the operation of a Subfranchise. We may revise the Approved Suppliers List and Approved Supplies List. We and the Approved Suppliers may make changes to the prices, delivery terms, and other terms relating to their respective sale of Approved Supplies to you, your Affiliate Franchisee and/or your Subfranchisees on 30 days' notice to you. We and the Approved Suppliers reserve the right to discontinue the sale of any Approved Supplies (or any part thereof) at any time we or the Approved Suppliers determine, in our or their sole judgment, that the continued sale of such item has become unfeasible, unprofitable, or otherwise undesirable. We give you the approved lists as we deem advisable.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 25–28)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the 'Approved Supplies List' is a list of approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies, and other items or services necessary to operate the Master Franchised Bhc Restaurant. This list is provided to franchisees and may specify a required manufacturer or supplier for a specific product or piece of equipment. Bhc reserves the right to designate a required source of supply for certain products and supplies, and Bhc or an affiliate may be a required source. The Approved Suppliers and Approved Supplies List are not specific to the operation of a Subfranchise. A copy of the current list of Approved Supplies List is attached as Exhibit H.
For a prospective Bhc franchisee, this means they are obligated to purchase certain items from suppliers approved by Bhc to ensure uniformity and quality across the system. Bhc may revise the Approved Suppliers List and Approved Supplies List. Bhc and the Approved Suppliers may make changes to the prices, delivery terms, and other terms relating to their respective sale of Approved Supplies to you, your Affiliate Franchisee and/or your Subfranchisees on 30 days' notice to you. This requirement helps maintain brand consistency but also limits the franchisee's ability to negotiate prices or choose suppliers based on personal preference.
Bhc also outlines the process for requesting approval of alternative supplies or suppliers not already on the approved list. Franchisees must notify Bhc in writing and submit sufficient information and samples for evaluation. Bhc will then provide written approval or disapproval within a reasonable time period, typically 30 days. The approval depends on factors such as product quality, delivery reliability, service standards, and the supplier's willingness to potentially compensate Bhc for the right to do business with the system. This process ensures that any deviations from the approved list still meet Bhc's standards, but it also adds an extra layer of administrative work for the franchisee.
The estimated proportion of required purchases from Approved Suppliers and leases by you to all purchases from Approved Suppliers and lease by you of goods and services in establishing your Master Franchise Business is 4% to 5% and operating your Master Franchise Business is 20% to 35%.