Does the Bhc Disclosure Document require Bhc to approve suppliers that would result in higher costs?

According to Bhc's 2025 Franchise Disclosure Document, Bhc is not required to approve suppliers that would result in higher costs for franchisees. The document states that nothing within it requires Bhc to approve an inordinate number of suppliers for a given item or to approve suppliers that, in Bhc's reasonable judgment, would lead to increased costs for its franchisees. Bhc also retains the right to ensure effective and economical supervision of suppliers.

This stipulation protects franchisees from potentially inflated supply costs that could arise if Bhc were obligated to approve a large number of suppliers without considering cost efficiency. It also allows Bhc to maintain control over its supply chain, ensuring that approved suppliers meet the brand's standards without imposing undue financial burdens on franchisees.

However, Bhc does reserve the right to designate a required source of supply for certain products and supplies, and Bhc or an affiliate may be a required source. Bhc also states that supplier approval will depend on product quality, delivery frequency and reliability, service standards, financial capability, customer relations, concentration of purchases with limited suppliers to obtain better prices and service, and/or a supplier's willingness to pay Bhc or its affiliates for the right to do business with the Bhc system. Prospective franchisees should be aware of these conditions and how they might affect their operational costs and supplier options.