How many Affiliate Franchised Bhc Restaurants must the Master Franchisee establish before granting subfranchises to third parties?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee" means in relation to a Master Franchisee, any person controlling, controlled by or under common control with Master Franchisee, either directly or indirectly through one or more intermediaries. In addition, Master Franchisee must establish and operate at least one (1) Affiliate Franchised BHC Restaurants within the Development Area pursuant to separate Subfranchise Agreemen
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee must first establish and operate at least one Affiliate Franchised Bhc Restaurant within their designated Development Area before they are permitted to grant subfranchises to third parties. This requirement ensures that the Master Franchisee has direct experience in operating a Bhc restaurant and understands the Bhc system before licensing it to others. The Affiliate Franchised Bhc Restaurant must operate under a separate Subfranchise Agreement.
This condition is in place to ensure that the Master Franchisee is well-versed in the operational aspects of the Bhc franchise. By requiring the Master Franchisee to first establish and run an Affiliate Franchised Bhc Restaurant, Bhc aims to maintain consistency and quality across all its franchised locations. This also allows the Master Franchisee to demonstrate the viability of the Bhc business model within their specific Development Area before expanding through subfranchising.
Furthermore, the FDD states that the Master Franchisee cannot directly operate Bhc restaurants, but can only do so through an Affiliate Franchisee that enters into a Subfranchise Agreement with the Master Franchisee. This distinction is important as it clarifies the operational structure and the relationship between the Master Franchisee, their affiliate, and any subsequent subfranchisees. This structure ensures that all parties are bound by the terms of the Subfranchise Agreement, maintaining uniformity and control within the Bhc franchise system.