Where is the Development Area described in the Bhc Master Franchise Agreement (MFA)?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
, accounts and other information as we may require relating to the potential premises.
Item 12: Territory
We will grant you the right to operate a Master Franchise Business within a specific Development Area described in Appendix I of the MFA. In establishing the geographic territory or territories that will make up your Development Area, we will analyze the size, population and number of DMAs located within the proposed geographic territory or territories. We grant you a franchise for a specific location, which we must approve according to site selection procedures described in Item 11 of this Disclosure Document. You may face competition from other franchisees, from BHC Restaurants that we own, or from other channels of distribution or competitive brands that we control. All territories granted by us are subject to exceptions and reservations.
As further described in Item 1, under the MFA, we grant to you within the Development Area both Development Rights (the right to grant subfranchises to Subfranchisees for the establishment and operation of Master Franchised BHC Restaurants) and Operating Rights (the right to own and operate (through Affiliate Franchisee) Master Franchised BHC Restaurants once opened, and to support, and receive fees from, as applicable, all existing Master Franchised BHC Restaurants within the Development once opened). You may not directly operate Master Franchised BHC Restaurants under the MFA, but may only do so through an affiliate that enters into a then-current Franchise Agreement with us. In addition, you must establish and operate at least one (1) Affiliate Franchised BHC Restaurants within the Development Area pursuant to separate Subfranchise Agreements before you may grant subfranchises to third parties for the establishment and operation of Subfranchised BHC Restaurants within the Development Area.
If you enter into an MFA with us, we will not establish or franchise anyone else to establish any BHC Restaurant in the Development Area up to the earlier of: (i) the expiration or termination of the MFA. The Development Area generally consists of a city or a portion of a city. Captive locations will be excluded from your Designated Area, and we have the right to develop or franchise the following captive locations: (1) military bases; (2) public transportation facilities; (3) sports facilities, including race tracks; (4) student unions or other similar buildings on college or university campuses; (5) amusement and theme parks; (6) malls; (7) special events; (8) hospitals; (9) hotel, resort, or other lodging facility; (10) state or national parks; (11) exhibition hall; conference facility or convention center; (12) casino or gambling establishment; (13) esports events and venues; (14) street fairs;
Source: Item 12 — Territory (FDD pages 38–39)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the specific Development Area granted to a master franchisee is detailed in Appendix I of the Master Franchise Agreement (MFA). Bhc determines the geographic territory by analyzing the size, population, and number of Designated Market Areas (DMAs) within the proposed territory. This Development Area generally consists of a city or a portion of a city.
Bhc retains the right to develop or franchise specific "Captive Locations" within the Development Area, including military bases, public transportation facilities, sports facilities, college campuses, amusement parks, malls, special events, hospitals, hotels, state and national parks, convention centers, casinos, esports venues, street fairs, and delivery facilities. These Captive Locations are excluded from the franchisee's Designated Area.
The continuation of the franchisee's exclusive rights to develop Bhc restaurants depends on meeting the development schedule outlined in the MFA. The Development Area cannot be altered unless both Bhc and the franchisee mutually agree to the changes in writing. However, Bhc may terminate the MFA if the franchisee fails to meet the development schedule, comply with the terms of the MFA, attempts unauthorized transfers, or fails to comply with any other agreements with Bhc or its affiliates.
Prospective franchisees should carefully review Appendix I of the MFA to fully understand the scope and limitations of their Development Area, including any specific exclusions or conditions. It is also important to understand the development schedule requirements and the potential consequences of failing to meet those requirements, as this could lead to termination of the MFA.