Is the deposit paid to Bhc for Master Franchised restaurants refundable?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
L INVESTMENT: First Affiliate Franchised BHC Restaurant**
| Type of | Amount** | Method of | When Due | To Whom Payment |
|---|---|---|---|---|
| Expenditure | Payment | Is to | ||
| (1) | Be Made | |||
| Initial Franchise | $40,000 | Lump sum; | At signing of MFA | Franchisor |
| Fee (2) | non-refundable | |||
| Initial Deposit | $20,000 | Lump sum; refundable at expiration of Franchise Agreement | At signing of MFA. | Franchisor |
| Type of Expenditure (1) | Amount** | Method of Payment | When Due | To Whom Payment Is to Be Made |
| ---------------------------------------------------------- | ----------------------------- | --------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- |
| Inspection Fee | $600 | Immediately upon our demand after leasehold improvement | We will make three (3) on-site visits to the Master Franchised BHC Restaurant before opening for inspection, which include a complete a final "walk through" inspection of the Master Franchised BHC Restaurant without you incurring additional fees. Any deficiencies noted by us because of our inspection must be corrected by you within 30 days or this Agreement may be terminated without any liability to us. If we provide any additional on-site visits after the third (3rd) time, you must reimburse us for the Actual Costs of each individual on-site visit. | Franchisor |
| Grand Opening | $10,000 to | Lump sum; | During the first 60 days | Advertisers and |
| Marketing | $13,000 | non-refundable | of opening | Vendors |
| Site Design Review Fee | $2,500 | Lump sum; |
Source: Item 7 — Estimated Initial Investment: (FDD pages 18–25)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the refundability of the deposit for Master Franchised restaurants depends on the type of deposit. There are two types of deposits mentioned in the document. The MF Development Fee, which is a lump sum paid upon signing the Master Franchise Agreement (MFA) for each Bhc restaurant to be opened, is explicitly non-refundable under any circumstances, even if the franchisee fails to open a restaurant.
However, there is also mention of an "Initial Deposit" of $20,000, which is refundable at the expiration of the Franchise Agreement. This deposit is a lump sum paid at the signing of the MFA. The document also mentions a general "Deposit" of $100,000 for five Master Franchised Bhc Restaurants, with the deposit amount varying depending on the number of restaurants.
Therefore, a prospective franchisee should clarify with Bhc which deposit is being referred to, as the MF Development Fee is non-refundable, while the Initial Deposit of $20,000 is refundable at the end of the agreement. Understanding the specific terms and conditions related to each type of deposit is crucial before entering into a franchise agreement with Bhc.