Which item in the Bhc Franchise Disclosure Document provides more information on the master franchisee's pre-opening purchase/lease obligations?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisee has not located a site for the 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 Master Franchisee's failing to find an acceptable site.
- (b) Master Franchisee must build out the Franchised BHC Restaurant (and commence operation of the Franchised Business there) within ten (10) months after Franchisor approves the BHC Restaurant premises, using architects, project managers, contractors, subcontractors, architectural plans, and key equipment suppliers reasonably acceptable to Franchisor. Master Franchisee must commence operation of the Franchised Business at the Franchised BHC Restaurant as soon as practicable after Master Franchisee's receipt of a certificate of occupancy (or equivalent document) from the responsible local government authority. If after Master Franchisee has located and secured suitable premises (that Franchisor consents to) for its BHC Restaurant, Master Franchisee has not commenced operation of the Franchised BHC Restaurant within fourteen (14) months after the Effective Date, Franchisor may terminate this Agreement effective on written notice.
- (c) Franchisor may, but is not obligated to, assist Master Franchisee in the site selection process. However, Franchisor reserves the sole right of final review and consent to any location of the Franchised BHC Restaurant. Franchisor uses available demographic information to evaluate the site and the area in which it is located, and analyze area income figures, traffic patterns, visibility, population density, competition, zoning, parking, accessibility, and other related, relevant circumstances. Franchisor's final review and consent to the location of the Franchised BHC Restaurant is not a guarantee that a BHC business can be successfully operated there or anywhere else.
- (d) Franchisor will provide Master Franchisee with a sample prototype layout for the Franchised BHC Restaurant. Franchisor will provide Master Franchisee a floor plan and Master Franchisee must pay Franchisor for all costs and expenses that Franchisor incurs in providing the site design review of $2,500 ("Site Design Review Fee") and site review fee of $2,000 to $4,000 ("Site Review Fee").
Source: Item 9 — Franchisee's Obligations (FDD pages 28–29)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Item 23 provides details regarding the master franchisee's pre-opening obligations related to purchasing or leasing a location. Specifically, the master franchisee is responsible for locating and securing premises acceptable to Bhc within four months of the agreement's effective date. The franchisee must submit site information to Bhc for approval and reimburse Bhc for any costs incurred during the review process. If Bhc doesn't approve a proposed site within a specified timeframe, the franchisee must propose an alternative location.
Bhc may assist in site selection but reserves the right to final review and consent. The master franchisee is responsible for building out the franchised location within ten months after Bhc approves the premises, using approved architects and suppliers. The franchisee must commence operations as soon as possible after receiving a certificate of occupancy. Failure to begin operations within fourteen months of the effective date may result in termination of the agreement.
The master franchisee is also responsible for employing approved professionals to adapt the prototype plans and specifications for the location. Bhc provides a sample prototype layout and floor plan, and the franchisee must pay Bhc a $2,500 Site Design Review Fee and a Site Review Fee ranging from $2,000 to $4,000. Bhc will conduct three on-site visits before opening and a final inspection, with the master franchisee covering an inspection fee of $600 plus all associated accommodation, transportation, and meal costs for Bhc's personnel.