What is the dependency between securing suitable premises and the timeline for commencing operation of the Bhc franchised business?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ation has been determined. In order to promote the orderly and timely service of BHC customers, Franchisee may not cater or deliver BHC Products through other channels without Franchisor's prior written consent. Due to landlord obligations under other leases or other restrictions imposed by government authorities, not all BHC Products may be available to be offered to customers at some Franchised BHC Restaurants (including Franchisee's Franchised BHC Restaurant).
7.2 Building Out Franchisee's Franchised BHC Restaurant.
(a) Premises acceptable to Franchisor where Franchisee's Franchised BHC Restaurant will be operated must be located and secured by Franchisee and reviewed and consented to by Franchisor within four (4) months after the Effective Date. Upon signing this Franchise Agreement, Franchisee must promptly locate one or more proposed sites which meet Franchisor's current standards and specifications. For each proposed site, Franchisee will submit to Franchisor certain information regarding the site that Franchisor requests. Upon receiving the information regarding a proposed site, Franchisor will review the information and either accept or reject the proposed site. For any site that Franchisor reviews, Franchisee must reimburse Franchisor for all costs and expenses that Franchisor incurs in reviewing the site. If Franchisor does not approve the proposed site within 30 days after Franchisee's complete submission of the requested information (or 15 days after Franchisee provides any supplemental information Franchisor requests), the site will be deemed rejected. If Franchisor disapproves, Franchisee must promptly propose an alternative location. Franchisor does not locate sites for Franchisee. However, Franchisor may, without, obligation, assist Franchisee in locating or evaluating a site for a reasonable fee. If Franchisee has not located a site for Franchisee's Franchised BHC Restaurant that is acceptable to Franchisor within four (4) months after the Effective Date, Franchisor may cancel this Agreement on the basis of Franchisee's failing to find an acceptable site.
- (b) Franchisee must build out Franchisee's Franchised BHC Restaurant (and commence operation of the Franchised Business there) within ten (10) months after Franchisor approves the Franchised BHC Restaurant premises, using architects, project managers, contractors, subcontractors, architectural plans, and key equipment suppliers reasonably acceptable to Franchisor. Franchisee must commence operation of the Franchised Business at Franchisee's Franchised BHC Restaurant as soon as practicable after Franchisee's receipt of a certificate of occupancy (or equivalent document) from the responsible local government authority. If after Franchisee has located and secured suitable premises (that Franchisor consents to) for its Franchised BHC Restaurant, Franchisee has not commenced operation of the Franchised Business within fourteen (14) months after the Effective Date, Franchisor may terminate this Agreement effective on written notice.
- (c) Franchisor may, but is not obligated to, assist Franchisee in the site selection process. However, Franchisor reserves the sole right of final review and consent to any location of the Franchised BHC Restaurant. Franchisor uses available demographic information to evaluate the site and the area in which it is located, and analyze area income figures, traffic patterns, visibility, population density, competition, zoning, parking, accessibility, and other related, relevant circumstances. Franchisor's final review and consent to the location of Franchisee's Franchised BHC Restaurant is not a guarantee that a BHC business can be successfully operated there or anywhere else.
- (d) Franchisor will provide Franchisee with a sample prototype layout for the Franchised BHC Restaurant. Franchisor will provide Franchisee a floor plan. Franchisee must pay Franchisor for all costs and expenses that Franchisor incurs in providing the site design review fee of $2,500 ("Site Design Review Fee") and a separate site review fee of $2,000 to $4,000 ("Site Review Fee"). At Franchisee's sole expense, Franchisee must employ directly architects, designers, engineers, or others as reasonably acceptable to Franchisor to complete, adapt, modify, or substitute the sample plans and specifications for the Franchised BHC Restaurant, and review and monitor all licensing related matters. Developer shall be solely responsible for acquiring all of the necessary permits and licenses, including but not limited to permits related to structural reinforcement, grease interceptors, and parking. The architect must submit a complete set of final plans and specifications to Franchisor before commencing leasehold improvement of the Franchised BHC Restaurant. Franchisor will review these plans and specifications promptly and accept them as stated or provide Franchisee with Franchisor's comments on the plans and specifications. Franchisor will have complete and uncontested control over the design of the Franchised BHC Restaurant and Franchisee may not modify the design or choose third party designers without Franchisor's express written consent.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, securing suitable premises is critical to the timeline for opening a franchised restaurant. The franchisee must locate and secure premises acceptable to Bhc within four months of the Franchise Agreement's effective date. Bhc must review and consent to the location. Failure to secure an approved site within this timeframe can result in Bhc canceling the Franchise Agreement. The franchisee is responsible for reimbursing Bhc for all costs associated with the site review. If Bhc does not approve the proposed site within 30 days after the franchisee's complete submission of the requested information (or 15 days after supplemental information), the site will be deemed rejected.
Once Bhc approves the premises, the franchisee has ten months to build out the restaurant and commence operations. This build-out must be done using architects, project managers, contractors, subcontractors, architectural plans, and key equipment suppliers reasonably acceptable to Bhc. The franchisee must begin operations as soon as possible after receiving a certificate of occupancy (or equivalent document) from the local government authority.
If the franchisee fails to commence operations within fourteen months after the Effective Date, even after securing suitable premises approved by Bhc, Bhc has the right to terminate the Franchise Agreement. Bhc may assist in the site selection process but is not obligated to do so, and retains the sole right of final review and consent. This consent does not guarantee the success of the business at that location. The franchisee is also responsible for a Site Design Review Fee of $2,500 and a Site Review Fee of $2,000 to $4,000.
Bhc is not responsible for delays in the leasehold improvement, equipping, or decoration of the Franchised BHC Restaurant or for any loss resulting from the Franchised BHC Restaurant design or leasehold improvement since Bhc has no control over the landlord or developer and numerous leasehold improvement-related problems which could occur, consequently delaying the opening of Franchisee's Franchised BHC Restaurant. Any changes to the restaurant plans must be approved in writing by Bhc before leasehold improvements begin. The franchisee's failure to promptly commence and diligently complete the design, leasehold improvement, inventorying, equipping, and opening of the Franchised BHC Restaurant will be a material breach of this Agreement.