Is the Bhc franchisor obligated to locate sites for the franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ation has been determined. In order to promote the orderly and timely service of BHC customers, Franchisee may not cater or deliver BHC Products through other channels without Franchisor's prior written consent. Due to landlord obligations under other leases or other restrictions imposed by government authorities, not all BHC Products may be available to be offered to customers at some Franchised BHC Restaurants (including Franchisee's Franchised BHC Restaurant).
7.2 Building Out Franchisee's Franchised BHC Restaurant.
(a) Premises acceptable to Franchisor where Franchisee's Franchised BHC Restaurant will be operated must be located and secured by Franchisee and reviewed and consented to by Franchisor within four (4) months after the Effective Date. Upon signing this Franchise Agreement, Franchisee must promptly locate one or more proposed sites which meet Franchisor's current standards and specifications. For each proposed site, Franchisee will submit to Franchisor certain information regarding the site that Franchisor requests. Upon receiving the information regarding a proposed site, Franchisor will review the information and either accept or reject the proposed site. For any site that Franchisor reviews, Franchisee must reimburse Franchisor for all costs and expenses that Franchisor incurs in reviewing the site. If Franchisor does not approve the proposed site within 30 days after Franchisee's complete submission of the requested information (or 15 days after Franchisee provides any supplemental information Franchisor requests), the site will be deemed rejected. If Franchisor disapproves, Franchisee must promptly propose an alternative location. Franchisor does not locate sites for Franchisee. However, Franchisor may, without, obligation, assist Franchisee in locating or evaluating a site for a reasonable fee. If Franchisee has not located a site for Franchisee's Franchised BHC Restaurant that is acceptable to Franchisor within four (4) months after the Effective Date, Franchisor may cancel this Agreement on the basis of Franchisee's failing to find an acceptable site.
- (b) Franchisee must build out Franchisee's Franchised BHC Restaurant (and commence operation of the Franchised Business there) within ten (10) months after Franchisor approves the Franchised BHC Restaurant premises, using architects, project managers, contractors, subcontractors, architectural plans, and key equipment suppliers reasonably acceptable to Franchisor. Franchisee must commence operation of the Franchised Business at Franchisee's Franchised BHC Restaurant as soon as practicable after Franchisee's receipt of a certificate of occupancy (or equivalent document) from the responsible local government authority.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees are primarily responsible for finding and securing a location for their restaurant. Specifically, the FDD states that Bhc does not locate sites for the franchisee, putting the onus on the franchisee to find suitable premises. The franchisee must locate and secure premises acceptable to Bhc within four months of the franchise agreement's effective date.
While Bhc does not have an obligation to locate sites, they may offer assistance in the site selection process. However, this assistance is not guaranteed, and Bhc retains the right to final review and consent for any location. Bhc evaluates potential sites using demographic information, analyzing factors such as income figures, traffic patterns, population density, and competition.
Even with Bhc's review and consent, franchisees should understand that this approval does not guarantee the success of the business at that location. Ultimately, the responsibility for selecting a viable site rests with the franchisee, making thorough due diligence essential. Bhc also requires franchisees to pay for site design and review fees, specifically a $2,500 Site Design Review Fee and a Site Review Fee ranging from $2,000 to $4,000.