Which Bhc FDD item discusses Promotion and Development of Master Franchise Business for Bhc?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
3.6 Promotion and Development of Master Franchise Business.
Master Franchisee undertakes to and guarantees to secure, establish and operate, through its Subfranchisees under Subfranchise Agreements, not less than the cumulative number of BHC Restaurants (including Franchised BHC Restaurants) in the Development Area by each of the dates specified in the "Initial Development Schedule" (attached hereto as Exhibit 1).The required BHC Restaurant quotas listed in the Initial Development Schedule are each an "Initial Development Quota" and are collectively referred to as the "Initial Development Quotas." As further described in section 3.1, Master Franchisee must establish and operate at least one (1) Franchised BHC Restaurant within the Development Area pursuant to separate Subfranchise Agreements before Master Franchisee may grant subfranchises to third parties for the establishment and operation of Subfranchised BHC Restaurants within the Development Area. If Master Franchisee fails to meet any of the Initial Development Quotas by the date specified in the
Initial Development Schedule, Franchisor shall have the right to collect from Master Franchisee an amount up to the then-current MF Development Fee Master Franchisee is required to pay Franchisor pursuant to section 4.1(b) for each BHC Restaurant short of the applicable Initial Development Quota. Master Franchisee shall pay to Franchisor any such amount within seven (7) days of receipt of Franchisor's request for payment.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Item 23, Receipts, contains information regarding the promotion and development of the Master Franchise business. Specifically, section 3.6 within Item 23 addresses the Master Franchisee's obligations to secure, establish, and operate a minimum number of Bhc restaurants through Subfranchise Agreements, as outlined in the Initial Development Schedule.
The Master Franchisee must establish and operate at least one franchised Bhc restaurant before granting subfranchises to third parties. Failure to meet the Initial Development Quotas by the specified dates in the Initial Development Schedule may result in Bhc collecting a fee from the Master Franchisee. This fee can be up to the then-current MF Development Fee, which the Master Franchisee is required to pay for each Bhc restaurant short of the quota.
The Master Franchisee is obligated to pay this amount within seven days of receiving Bhc's request for payment. This section outlines the financial repercussions and development responsibilities placed on the Master Franchisee to ensure the growth and expansion of the Bhc brand within their designated territory.