Is the initial franchise fee for Bhc restaurants refundable?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
L INVESTMENT: First Affiliate Franchised BHC Restaurant**
| Type of | Amount** | Method of | When Due | To Whom Payment |
|---|---|---|---|---|
| Expenditure | Payment | Is to | ||
| (1) | Be Made | |||
| Initial Franchise | $40,000 | Lump sum; | At signing of MFA | Franchisor |
| Fee (2) | non-refundable | |||
| Initial Deposit | $20,000 | Lump sum; refundable at expiration of Franchise Agreement | At signing of MFA. | Franchisor |
| Type of Expenditure (1) | Amount** | Method of Payment | When Due | To Whom Payment Is to Be Made |
| ---------------------------------------------------------- | ----------------------------- | --------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- |
| Inspection Fee | $600 | Immediately upon our demand after leasehold improvement | We will make three (3) on-site visits to the Master Franchised BHC Restaurant before opening for inspection, which include a complete a final "walk through" inspection of the Master Franchised BHC Restaurant without you incurring additional fees. Any deficiencies noted by us because of our inspection must be corrected by you within 30 days or this Agreement may be terminated without any liability to us. If we provide any additional on-site visits after the third (3rd) time, you must reimburse us for the Actual Costs of each individual on-site visit. | Franchisor |
| Grand Opening | $10,000 to | Lump sum; | During the first 60 days | Advertisers and |
| Marketing | $13,000 | non-refundable | of opening | Vendors |
| Site Design Review Fee | $2,500 | Lump sum; non-refundable | Upon Submission of floor plan | Paid to Franchisor /vendors. |
| Site Review Fee | $2,000 to $4,00 |
Source: Item 7 — Estimated Initial Investment: (FDD pages 18–25)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the initial franchise fee is generally non-refundable. Specifically, the document states that the initial franchise fee of $40,000 is a lump sum payment due at the signing of the Master Franchise Agreement (MFA) and is non-refundable. This means that once a prospective franchisee pays this fee to Bhc, it will not be returned, regardless of whether the franchisee ultimately opens a restaurant. This is a standard practice in franchising, as the initial fee compensates the franchisor for the costs associated with granting the franchise and providing initial support.
In addition to the initial franchise fee, Bhc also collects other fees that are non-refundable. For example, the grand opening marketing fee, which ranges from $10,000 to $13,000, the site design review fee of $2,500, and the site review fee, which ranges from $2,000 to $4,000, are all non-refundable. However, the initial deposit of $20,000 is refundable at the expiration of the Franchise Agreement.
Prospective Bhc franchisees should carefully consider the non-refundable nature of these fees before investing in a franchise. It is important to conduct thorough due diligence and ensure that they are fully committed to the franchise opportunity before signing the MFA and paying the initial franchise fee. Understanding which fees are non-refundable and the conditions under which any fees might be returned is a crucial part of the investment decision.