What items in the Bhc Franchise Disclosure Document provide more detailed information about the master franchisee's site selection and acquisition/lease obligations?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee signs this Agreement, the exact location of the Franchised BHC Restaurant will be inserted into a restated Exhibit 1 attached to this Agreement as soon as its location has been determined.
7.2 Building Out Master Franchised BHC Restaurant.
(a) Premises acceptable to Franchisor where Master Franchised BHC Restaurant will be operated must be located and secured by Master Franchisee and reviewed and consented to by Franchisor within four (4) months after the Effective Date. Upon signing this Franchise Agreement, Master
Franchisee must promptly locate one or more proposed sites which meet Franchisor's current standards and specifications. For each proposed site, Master Franchisee will submit to Franchisor certain information regarding the site that Franchisor requests. Upon receiving the information regarding a proposed site, Franchisor will review the information and either accept or reject the proposed site. For any site that Franchisor reviews, Master Franchisee must reimburse Franchisor for all costs and expenses that Franchisor incurs in reviewing the site. If Franchisor does not approve the proposed site within 30 days after Master Franchisee's complete submission of the requested information (or 15 days after Master Franchisee provides any supplemental information Franchisor requests), the site will be deemed rejected. If Franchisor disapproves, Master Franchisee must promptly propose an alternative location. Franchisor does not locate sites for Master Franchisee. However, Franchisor may, without, obligation, assist Master Franchisee in locating or evaluating a site for a reasonable fee. If Master Franchisee 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.
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 site selection and acquisition/lease obligations. The master franchisee must locate and secure premises acceptable to Bhc within four months of the agreement's effective date. The franchisor does not locate sites for the master franchisee, but may assist in the process for a reasonable fee.
The master franchisee is responsible for submitting site information to Bhc for approval and must reimburse Bhc for all costs incurred during the review process. If Bhc does not approve a proposed site within 30 days of complete submission (or 15 days after supplemental information), the site is deemed rejected. If the master franchisee fails to secure an acceptable site within four months, Bhc reserves the right to cancel the agreement.
Furthermore, the master franchisee must build out the Franchised Bhc Restaurant and commence operations within ten months after Bhc approves the premises, using approved architects, project managers, contractors, and suppliers. Operation must begin as soon as possible after receiving a certificate of occupancy. Failure to commence operation within fourteen months after the effective date may result in termination of the agreement by Bhc. Bhc also uses demographic information to evaluate potential sites, analyzing factors such as income, traffic, visibility, population density, competition, zoning, parking, and accessibility. The master franchisee must also pay Bhc a $2,500 site design review fee and a $2,000 to $4,000 site review fee.