What items in the Bhc Franchise Disclosure Document discuss the franchisee's obligation for pre-opening purchases and leases?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ation about your obligations in these agreements and in other items of this disclosure document.**
| Obligation | Section in MFA | Disclosure Document Item |
|---|---|---|
| a. Site selection and acquisition/lease | 7.1, 7.2, 8.6, , Exhibit 1 | 7.2, 11 |
| b. Pre-opening purchases/leases | 7.1, 7.3, | 8 |
| c. Site development and other pre-opening requirements | 3.4, 3.6 | 6, 7, 11 |
| d. Initial and ongoing training | 6.1 – 6.3 | 11 |
| e. Opening | 7.1, Exhibit 1 | 11 |
| f. Fees | 4.1, 4.2, 4.3 | 5, 6, 7 |
| g. Compliance with standards and policies/ operating | 3.4, 3.9 | 11 |
| h. Trademarks and proprietary information | 9.1 – 9.5 | 13,14 |
| i. Restrictions on products/services offered | 3.5 – 3.7 | 16 |
| j. Warranty and customer service requirements | Not applicable | 11 |
| k. Territorial development and sales quotas | 3.1, 3.4, Exhibit 1 | 12 |
| l. Ongoing product/service purchases | 7.3 | 8 |
| m. Maintenance, appearance, and remodeling | 8.5 | 11 |
| n. Insurance | 8.9 | 6, 8 |
| o. Advertising | 10.1, 10.2 | 6,11 |
| p. Indemnification | 11,16.2 | 6 |
| q. Owner's participation/management/ staffing | 18.1 | 11,15 |
| r. Records and reports | 5.2, 8.7 | 6 |
| s. Inspections and audits | 8.10 | 6,11 |
| --- | --- | --- |
| t. Transfer | 12.1 – 12.6 | 17 |
| u. Renewal | 5.2 | 17 |
| v. Post-termination obligations | 6.2, 6.3, 6.4, 11.2 | 17 |
| w. Non-competition covenants | 11.1 – 11.3 | 17 |
| x. Dispute resolution | 14.1 – 14.5 | 17 |
| y. Compliance with anti-terrorism and other federal laws | 16.12 | 9 |
Item 10: Financing
We do not offer any direct or indirect financing in connection with a Master Franchise Business. We do not guarantee your notes, leases, or any obligation. We are unable to estimate if you will be able to obtain financing from third parties and, if so, the terms and conditions of financing.
Item 11: Franchisor's Assistance, Advertising, Computer Systems, And Training
Except as listed below, BHC is not required to provide you with any assistance.
- (1) Before you commence operations of your Master Franchise Business, we will:
- (i) Provide the initial training program described in the MFA.
- (ii) Provide on loan to you one copy of, or allow electronic access to, our Manuals, including our Master Franchise Operations Manual, Operations Manual, as described below.
- (iii) Provide you with lists of Supplies, including the Products, and Designated Suppliers, and sell Supplies to you.
- (2) After you commence operations of your Master Franchisee Business, we will:
- (i) Provide opening support services to you immediately before the opening of your first Affiliate Franchised BHC Restaurant in the Development Area as described below.
- (ii) Provide the initial training program described below to additional and replacement trainees for a fee.
- (iii) Provide the Re-training Program described below to training supervisor or district manager of your Subfranchisees for a fee.
- (iv) Review and discuss with you the annual business plan you submit.
- (v) Provide periodic updates to the Manuals.
- (vi) Provide you with updated lists of Approved Supplies and Designated Suppliers, and continue to sell Approved Supplies to you.
- (vii) Evaluate your requests to approve Alternative Supplies and Alternative Suppliers.
(3) Pre-Opening Assistance for Affiliate Franchised BHC Restaurant
Before you open your Affiliate Franchised BHC Restaurant, we will:
- (i) Not assist your Affiliate Franchisee in locating a site and negotiating the purchase or lease of the site.
- (ii) Not provide assistance with conforming the premises to local ordinances and building codes and obtaining any required permits.
- (iii) Provide you with a general plan for the layout, constructing, remodeling, and furnishing your Affiliate Franchised BHC Restaurant. You are responsible for the costs of preparing architectural, engineering and leasehold improvement drawings and site plans, which you must submit to us for our review and approval before you begin leasehold improvement of your Affiliate Franchised BHC Restaurant. You are responsible for the costs of leasehold improvement and remodeling. Unless we notify you in writing that the plans and modifications are accepted, they will be deemed rejected. You may not open your Affiliate Franchised BHC Restaurant until you receive written authorization from us to do so, which may be subject to our satisfactory inspection of your Affiliate Franchised BHC Restaurant.
- (iv) Train your Principal Equity Operators, General Manager (both as defined in the Franchise Agreement), and your manager-level employees to operate an Affiliate Franchised BHC Restaurant. We will provide approximately ten (10) days of training (although the specific number of days depends on our opinion of your experience and needs) at your Affiliate Franchised BHC Restaurant or another location we designate. The below training instructors we provide are starting their initial year with the Franchisor but will have had approximately 7-10 years of experience in the field with regard to each subject being taught. You must attend the entire training program. You also must pay for all daily allowance, travel, meals, and living expenses that we incur for training. These costs will vary for each franchise and each location depending on a number of factors. Training will occur after you sign the Franchise Agreement and while you are developing the Affiliate Franchised BHC Restaurant.
Source: Item 9 — Franchisee's Obligations (FDD pages 28–29)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations, referencing other sections and items within the document that detail these responsibilities. Specifically, the table in Item 9 indicates that the franchisee's obligations regarding pre-opening purchases and leases are further detailed in Section 7.1 and 7.3 of the MFA (presumably the Master Franchise Agreement) and in Item 8 of the Franchise Disclosure Document.
Item 7.3 and Item 23 discuss equipment and inventory. Item 7.3 states that the franchisee must purchase and maintain the equipment and inventory needed to meet consumer demand for Bhc products. Item 23 indicates that before opening the Franchised Bhc Restaurant, the franchisee must purchase an opening inventory of merchandise and supplies, including certain proprietary products, from Bhc and its affiliates. Bhc will provide a list of approved manufacturers, suppliers, and distributors, as well as a list of approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies, and other items or services necessary to operate the Franchised Bhc Restaurant.
Item 23 also states that the franchisee has the sole responsibility for locating, securing, and obtaining suitable premises for the Bhc Restaurant, unless otherwise agreed in writing by the franchisee and Bhc. The franchisee and the landlord will be required to execute an addendum to the lease that grants Bhc an option to assume the franchisee's position as lessee under the lease under certain conditions, such as a material breach of the lease or the Franchise Agreement. This addendum also grants Bhc the right to assign the lease to another franchisee and requires the landlord to cooperate with Bhc in de-identifying the restaurant if the agreement is terminated or expires and Bhc does not exercise its option to assume the lease.