Which Bhc FDD item discusses the Extent of Grant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
within Franchisee's Territory.
3.3 Promotion and Development of Franchisee's Franchised BHC Restaurant.
Franchisee must (i) diligently and effectively promote, market, and engage in the Franchised Business at its Franchised BHC Restaurant; (ii) develop, to the best of its ability, the potential for future Franchised Business as approved by the Franchisor; and (iii) devote and focus a substantial portion of Franchisee's attentions and efforts to such promotion and development.
3.4 Extent of Grant.
- (a) Franchisee understands and agrees that Franchisee is licensed hereby only for the operation of the Franchised Business at and from Franchisee's Franchised BHC Restaurant and only at Franchisee's Location (unless Franchisor specifically agrees otherwise on a case-by-case basis). Franchisee must offer and sell at Franchisee's Franchised BHC Restaurant and at Franchisee's Location only BHC Products and other goods and services that Franchisor designates as required or approved for all franchisees. Franchisor has the right to change and add other authorized goods and services, which Franchisee will then be required to offer.
- (b) Franchisee may not sublicense, sublease, subcontract or enter any management agreement, concession agreement, partnership agreement or joint venture agreement providing for, the right to operate the Franchised Business or to use the System granted pursuant to this Agreement.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Item 23 includes information regarding the Extent of Grant in sections 3.4 and 3.7. Section 3.4 pertains to the standard franchisee, while section 3.7 is specific to the master franchisee.
Specifically, section 3.4(a) states that the franchisee is only licensed to operate the franchised business at their BHC restaurant location, unless Bhc agrees otherwise on a case-by-case basis. The franchisee must offer and sell only BHC products and other goods and services that Bhc designates as required or approved. Bhc retains the right to change and add other authorized goods and services, which the franchisee will then be required to offer. Section 3.4(b) specifies that the franchisee cannot sublicense, sublease, subcontract, or enter into any agreement that provides the right to operate the franchised business or use the system without explicit permission.
For master franchisees, section 3.7(a) clarifies that the master franchisee is licensed only for the operation of the franchised business within their development area. The master franchisee must conduct its business in its territory using only BHC products and other goods and services that Bhc designates as required or approved. Bhc retains the right to change and add other authorized goods and services, which the master franchisee will then be required to offer.
These stipulations are typical in franchising, as franchisors like Bhc need to maintain control over their brand, products, and service offerings to ensure consistency and quality across all locations. Prospective franchisees should carefully consider these limitations and obligations to ensure they align with their business goals and capabilities.