What happens to the remaining amount of the Initial Deposit for a Bhc Master Franchise Business upon expiration or termination of the MFA?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
if you fail to open a BHC Restaurant.
In addition, the Initial Deposit for a Master Franchise Business is $20,000 for each BHC Restaurant in your Development Schedule ("Initial Deposit"). The Deposit is due and payable in full when you sign the MFA. The purpose of the Deposit is to secure against non-payment of your obligations under the MFA, and we reserve the right to use the Deposit to compensate ourselves for certain damages and expenses during the term of the MFA, and you must replenish the Deposit to its original amount if we make any deductions. Upon the expiration or termination of the MFA, we will return to you the remaining amount of the Initial Deposit, if any, without interest, after offsetting any sums owed you owe t
Source: Item 5 — Initial Fees (FDD pages 11–12)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Initial Deposit for a Master Franchise Business is $20,000 for each Bhc Restaurant in the Development Schedule. This deposit is paid in full when signing the Master Franchise Agreement (MFA). The purpose of the deposit is to act as security against non-payment of obligations under the MFA, and Bhc has the right to use the deposit to cover damages and expenses during the term of the MFA. If Bhc deducts any amount from the deposit, the franchisee must replenish it to the original amount.
Upon the expiration or termination of the MFA, Bhc will return the remaining amount of the Initial Deposit, if any, without interest. This refund is issued after offsetting any sums the franchisee owes to Bhc, and the refund will be processed as soon as reasonably practicable.
Item 23 in the 2025 FDD states that the deposit is refundable within sixty (60) days of the expiration or termination of the agreement only if the Master Franchisee is in full compliance with their obligations, including post-termination obligations. This means a franchisee needs to ensure all obligations are met to receive the deposit back, and the timing of the refund may vary depending on the circumstances of the termination and the owed amounts.