Must a Bhc franchisee conform to Bhc's standards and operating procedures?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 8: Restrictions on Sources of Products and Services
You must, and ensure that your Affiliate Franchisee and your Subfranchisees: (i) advertise, sell, and serve all and only the products we authorize; (ii) purchase, and maintain inventory as needed to meet reasonably anticipated consumer demand of the BHC Products; and purchase and sell ancillary products, which may include books, specialty foods, packaged foods, books, hats, t-shirts, and novelty items, as we periodically specify, for sale at a Master Franchised BHC Restaurant ("Ancillary Products"). To ensure highest degree of consistency, service, and quality, you must practice and conform to, and ensure that your Affiliate Franchisee and your Subfranchisees maintain and comply with, the standards, operating procedures, specifications, and rules we have established for the operation of a Master Franchised BHC Restaurant, as modified by us from time to time including specifications as to ingredients, brand names, preparation, and presentation ("Standards"). You and your Affiliate Franchise must purchase, and must ensure that your Subfranchisees only purchase, all products that your Affiliate Franchise and your Subfranchisee offer from a Master Franchised BHC Restaurant, including products which bear any of our trademarks, solely and exclusively from BHC, or our designated supplier.
For purposes of clarification, except as otherwise provided in the MFA or in writing by us, you and your Affiliate Franchisee must purchase all BHC Products from BHC, and your Subfranchisees shall purchase all BHC Products to be used and sold from their Master Franchised BHC Restaurants from BHC or our affiliates. You may not, and must ensure that your Subfranchisees do not, distribute, sell, resell, supply, license, sublicense, lease, rent, loan, market, provide access to, make available or transfer any Supplies to any third party.
Required Purchases of Goods or Services, including Computer and Point of Sale System
In order to ensure a uniform image and uniform quality of products and services throughout the System, you and your Affiliate Franchisee must maintain and comply with and must ensure that your Subfranchisees maintain and comply with our Standards.
From time to time we, an affiliate or a third-party vendor or supplier may be the only approved supplier for certain products.
As of the date of this Disclosure Document, there are designated suppliers who are the only source for equipment, gift cards and merchandising materials, sauce mix, inventory items, signage, Computer System, and uniforms.
Franchisor or its Affiliates Acting as Approved Suppliers
As of the date of this Disclosure Document, we are not the only approved supplier for any goods or services.
Approved Suppliers and Approval of Alternative Suppliers
We provide you with a list of approved manufacturers, suppliers, and distributors ("Approved Suppliers List") and approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies and other items or services necessary to operate the Master Franchised BHC Restaurant ("Approved Supplies List"). The Approved Supplies List may specify a required manufacturer or supplier of a specific product or piece of equipment. We reserve the right to designate a required source of supply for certain products and supplies, and we or an affiliate may be a required source.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 25–28)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees must adhere to the brand's standards and operating procedures. To maintain consistency and quality, franchisees are required to practice and conform to the standards, operating procedures, specifications, and rules established by Bhc for operating a Master Franchised Bhc Restaurant. These standards may be modified by Bhc from time to time and include specifications related to ingredients, brand names, preparation, and presentation. Franchisees must also ensure that their Affiliate Franchisees and Subfranchisees comply with these standards.
To ensure a uniform image and quality across the Bhc system, franchisees, along with their Affiliate Franchisees, must comply with Bhc's standards. This compliance extends to Subfranchisees as well. These standards are issued through the Operations Manual and other written or email communications. Bhc also issues these standards to its designated and approved suppliers in writing or by email, and it may modify these standards at any time, provided that written notification of the modifications is delivered and franchisees or suppliers are given a reasonable amount of time to implement the changes.
Bhc also maintains an Approved Suppliers List, which includes approved manufacturers, suppliers, and distributors, as well as approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies, and other items or services necessary to operate the Master Franchised Bhc Restaurant. Bhc reserves the right to designate a required source of supply for certain products and supplies, and it or an affiliate may be a required source. The estimated proportion of required purchases from Approved Suppliers and leases by franchisees to all purchases from Approved Suppliers and lease by franchisees of goods and services is 4% to 5% when establishing a Master Franchise Business and 20% to 35% when operating the Master Franchise Business. If franchisees purchase from unapproved sources in violation of their MFA, Bhc may require them to purchase replacement products from a designated Approved Supplier or terminate their MFA.