What is the impact on remodeling costs if an existing facility is used for a Bhc restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
material and labor costs in the Affiliate Franchisee's area. These estimates are for new leasehold improvement and do not include tenant improvement allowances, if any. If the Affiliate Franchisee remodels an existing facility, we expect the Affiliate Franchisee's remodeling costs to be lower depending on the condition of the premises. If the Affiliate Franchisee chooses to purchase the land or building, the Affiliate Franchisee will incur substantial additional costs and expenses, which we cannot meaningfully estimate.
- (3) Leasehold improvement / Remodeling. Leasehold improvement / remodeling costs, including floor coverings, wall treatments, counters, ceilings, painting, window coverings, electrical, carpentry, and similar work, and contractor's fees depend on the site's condition, location, and size; the demand for the site among prospective lessees; the site's previous use; the build-out required to conform the site for the Affiliate Franchisee's Franchised BHC Restaurant; and any leasehold improvement or other allowances the landlord grants. The lower figure assumes that the Affiliate Franchisee has a unique real estate model; the higher figure assumes a high square footage model. The estimates included in the table above reflect the average deduction provided by landlords for tenant improvements and other allowances. These figures presume that the Affiliate Franchisee will lease the Master Franchised BHC Restaurant premises; if the Affiliate Franchisee choose to purchase the land or building, the Affiliate Franchisee will incur substantial additional costs and expenses, which we cannot meaningfully estimate. Costs may vary considerably depending on such factors as material and labor costs in your area. These estimates are for new leasehold improvement and do not include tenant improvement allowances, if any. If the Affiliate Franchisee remodels an existing facility, we expect the Affiliate Franchisee's remodeling costs to be lower depending on the condition of the premises. The Affiliate Franchisee must, at the Affiliate Franchisee's expense, employ a leasehold improvement company, architect, kitchen designer, interior designer, and signage company reasonably acceptable to us as may be necessary to complete, adapt, or modify the sample plans and specifications for the Affiliate Franchisee'
Source: Item 7 — Estimated Initial Investment: (FDD pages 18–25)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, remodeling costs for an existing facility are expected to be lower than those for a new leasehold improvement, but this depends heavily on the condition of the premises. The FDD notes that the estimates provided are for new leasehold improvements and do not include any potential tenant improvement allowances.
Several factors influence the leasehold improvement and remodeling costs, including the site's condition, location, size, demand among prospective lessees, previous use, and the build-out required to conform the site to Bhc's standards. Costs also depend on any leasehold improvement or other allowances granted by the landlord. These costs encompass various elements such as floor coverings, wall treatments, counters, ceilings, painting, window coverings, electrical work, carpentry, and contractor's fees.
Prospective Bhc franchisees should be aware that they must employ a leasehold improvement company, architect, kitchen designer, interior designer, and signage company acceptable to Bhc to adapt or modify the sample plans and specifications for their franchised restaurant. The FDD also mentions different real estate models that can affect costs, with a unique real estate model resulting in lower costs and a high square footage model leading to higher costs. It is important to note that these figures reflect the average deduction provided by landlords for tenant improvements and other allowances.