Did Bhc derive revenue, rebates, or other material consideration from required franchisee purchases or leases in 2024?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
In 2024, we did not derive revenue, rebates, or other material consideration as a result of required purchases or leases by BHC franchisees or as rebates.
We and our affiliates have the right to receive payments, rebates, and other forms of consideration from suppliers based upon your, your Affiliate Franchisee and your Subfranchisees (and other franchisees') purchases of goods, products, and services as described in this Item 8, as well as in connection with any future purchases of any goods, products, and services. Most of these payments are calculated as an amount based on products sold to you, your Affiliate Franchisee and your Subfranchisees. We will retain and use such payments as we deem appropriate or as required by the vendor or by manufacturers.
The estimated proportion of your 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%.
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, Bhc did not receive revenue, rebates, or other material consideration from required franchisee purchases or leases in 2024. However, Bhc and its affiliates retain the right to receive payments, rebates, and other forms of consideration from suppliers based on franchisee purchases of goods, products, and services. These payments are typically calculated based on the products sold to franchisees, and Bhc will retain and use such payments as deemed appropriate or as required by the vendor or manufacturers.
While Bhc does not directly profit from franchisee purchases in the form of revenue or rebates, they do negotiate prices for numerous products for the benefit of the System, but not on behalf of individual franchisees. Bhc may receive volume discounts for the System, which they will pass through to their franchisees.
Prospective franchisees should be aware that Bhc requires franchisees to purchase goods and services from approved suppliers. 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%. Franchisees are obligated to purchase replacement products from a designated Approved Supplier or risk termination of their Master Franchise Agreement (MFA) if they purchase from unapproved sources in violation of their MFA.
Bhc also requires franchisees, affiliate franchisees, and subfranchisees to reimburse them for all costs and expenses associated with any testing, including travel and lodging expenses, along with a daily allowance, incurred when Bhc deems it necessary to visit a supplier's facilities. Supplier approval depends on various factors, including product quality, delivery frequency and reliability, service standards, financial capability, customer relations, and a supplier's willingness to pay Bhc or its affiliates for the right to do business with their System.