Which Bhc FDD item discusses the Initial Deposit?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
4. INITIAL AND ON-GOING PAYMENTS BY FRANCHISEE
4.1 Initial Franchise Fee.
- (a) The "Initial Franchise Fee" for a single Franchised BHC Restaurant is $40,000.
- (b) The Initial Franchise Fee (and all other payments to Franchisor for goods or services received from Franchisor before Franchisee's Franchised BHC Restaurant opens for business) is due and payable in full, by cashier's check or money order or wire transfer to Franchisor. The Initial Franchise Fee is fully earned by Franchisor when paid.
4.2 Initial Deposit.
The "Initial Deposit" for a single Franchised BHC Restaurant is $20,000. The Initial Deposit is due and payable in full, by cashier's check or money order or wire transfer to Franchisor. The purpose of the Initial Deposit is to secure against non-payment of Franchisee's obligations under this Agreement. The Initial Deposit must be paid in a lump sum and is refundable within sixty (60) days of the expiration or termination of this Agreement if and only if Franchisee is in full compliance with Franchisee's obligations in this Agreement, including, without limitation, Franchisee's post termination obligations set forth in Section 15 thereof.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Item 4 outlines the initial and on-going payments required by the franchisee, including details about the Initial Deposit. Specifically, section 4.2 discusses the Initial Deposit for a single franchised Bhc restaurant, which amounts to $20,000. This deposit is payable in full via cashier's check, money order, or wire transfer to Bhc.
The purpose of the Initial Deposit is to act as security against non-payment of the franchisee's obligations as outlined in the franchise agreement. This means Bhc can use the deposit to cover any unpaid amounts or damages resulting from the franchisee's failure to meet their contractual obligations.
The Initial Deposit is refundable, but with conditions. It can be refunded within sixty days of the expiration or termination of the franchise agreement. However, this refund is contingent upon the franchisee's full compliance with all obligations under the agreement, including any post-termination obligations detailed in Section 15 of the FDD. This implies that if the franchisee has any outstanding debts or unfulfilled responsibilities at the end of the agreement, Bhc may deduct those amounts from the deposit before returning it, or potentially withhold the entire deposit if the breaches are significant enough.