From whom must a Bhc franchisee purchase products bearing Bhc trademarks?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 and their subfranchisees must purchase all products bearing Bhc trademarks solely and exclusively from Bhc or its designated supplier. This requirement is in place to ensure consistency, service, and quality across all Bhc restaurants, adhering to the standards and operating procedures established by Bhc. These standards include specifications for ingredients, brand names, preparation, and presentation.
This requirement extends to all products offered at a Master Franchised Bhc Restaurant. The FDD clarifies that franchisees and their affiliate franchisees must purchase all Bhc products from Bhc, while subfranchisees must purchase all Bhc products to be used and sold from their Master Franchised Bhc Restaurants from Bhc or its affiliates. Franchisees are prohibited from distributing, selling, reselling, supplying, licensing, or transferring any supplies to third parties.
Bhc also maintains an Approved Suppliers List, which is attached as Exhibit H to the FDD. This list specifies approved manufacturers, suppliers, and distributors for various items necessary to operate a Master Franchised Bhc Restaurant. While the Approved Suppliers List may specify a required manufacturer or supplier for a specific product, Bhc reserves the right to designate a required source of supply for certain products and supplies, which may include Bhc itself or an affiliate. Franchisees can propose alternative suppliers, but Bhc must approve them in writing, ensuring they meet the system's standards.
Prospective franchisees should carefully review Exhibit H and any updates to the Approved Suppliers List to understand the specific requirements and restrictions on sourcing products. It is also important to note that Bhc and its approved suppliers can change prices, delivery terms, and other terms relating to the sale of approved supplies with 30 days' notice. Additionally, Bhc may receive payments, rebates, and other forms of consideration from suppliers based on franchisee purchases, which Bhc will retain and use as deemed appropriate.