Do the leasehold improvement estimates for Bhc Restaurants include deductions provided by landlords for tenant improvements?

According to Bhc's 2025 Franchise Disclosure Document, the leasehold improvement estimates do not include tenant improvement allowances. The FDD specifies that the estimates provided are for new leasehold improvements. However, the document also states that the estimates included in the table reflect the average deduction provided by landlords for tenant improvements and other allowances. This means that while the initial estimates do not account for these allowances, the average deductions are considered in the overall figures.

For a prospective Bhc franchisee, this means that the initial investment for leasehold improvements could be offset by tenant improvement allowances received from the landlord. The actual amount of these allowances can vary depending on factors such as the site's condition, location, demand, previous use, and the build-out required. Franchisees should negotiate with landlords to secure the best possible tenant improvement allowances to reduce their initial investment.

It is important to note that if a franchisee remodels an existing facility, the remodeling costs are expected to be lower depending on the condition of the premises. However, if the franchisee chooses to purchase the land or building, they will incur substantial additional costs that are not included in the estimates. Therefore, franchisees should carefully consider their real estate options and factor in potential tenant improvement allowances when planning their initial investment.