What is the definition of 'MF Development Fee' for a Bhc franchise?

According to Bhc's 2025 Franchise Disclosure Document, the MF Development Fee is a non-refundable development/license fee that a franchisee pays to Bhc. The fee amount varies based on the development area, the number of Bhc Restaurants, and other special circumstances. However, the MF Development Fee for each Restaurant to be opened under the MFA shall not exceed $40,000 for each Bhc Restaurant, which is also known as the Initial Franchise Fee.

Upon signing the Master Franchise Agreement (MFA), the franchisee pays a lump sum, non-refundable MF Development Fee for the total number of Bhc Restaurants to be opened under the MFA. This fee is non-refundable under any circumstances, even if the franchisee fails to open a Bhc Restaurant. Bhc collects this fee as compensation for granting the Master Franchisee the exclusive right to open a specified number of Bhc Restaurants in a designated development area.

Prospective franchisees should understand that this fee is fully earned by Bhc upon payment and is not contingent on the success of the franchise. This is a common practice in franchising, where initial fees compensate the franchisor for granting rights and providing initial support. The franchisee bears the risk of development and operation, even after paying the MF Development Fee.