Does the Initial Deposit for a Bhc Master Franchise Business accrue interest?
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 does not accrue interest. The initial deposit is $20,000 for each Bhc Restaurant in the Development Schedule. This deposit is payable in full when the Master Franchise Agreement (MFA) is signed.
The purpose of the deposit is to protect Bhc against non-payment of obligations under the MFA. Bhc retains the right to use the deposit to cover damages and expenses incurred during the term of the MFA. If Bhc deducts any amount from the deposit, the franchisee must replenish it to its original amount.
Upon the expiration or termination of the MFA, Bhc will return any remaining amount of the initial deposit to the franchisee. This return will occur after offsetting any sums owed to Bhc, and it will be done as soon as reasonably practicable. However, the FDD explicitly states that this return will be made "without interest."