Can the Master Franchisee charge a Bhc Subfranchisee a royalty?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- i. Master Franchisee shall only charge each Subfranchisee such fees, payments and/or other consideration as may be established or approved by Franchisor in writing. Without limiting the forgoing, Master Franchise shall not charge a Subfranchisee a royalty fee of more than seven percent (7%) of Gross Revenue of the Subfranchisee's BHC Restaurant;
- ii. except as otherwise provided herein or approved by Franchisor in writing, the Subfranchise Agreements and Other Agreements shall be in compliance with, and no less onerous than, the terms of this Agreement;
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee can charge a royalty fee to Subfranchisees. However, Bhc mandates that the Master Franchisee must only charge fees, payments, and other considerations that Bhc has established or approved in writing.
Specifically, the royalty fee charged to a Subfranchisee by the Master Franchisee cannot exceed seven percent (7%) of the Subfranchisee's BHC Restaurant's Gross Revenue. This limitation ensures that Subfranchisees are not overburdened with excessive royalty payments, which could hinder their profitability and operational success.
Furthermore, all agreements between the Master Franchisee and Subfranchisees must comply with and be no less onerous than the terms outlined in the Master Franchise Agreement, unless otherwise approved in writing by Bhc. This provision ensures consistency and protects the interests of both the franchisor and the subfranchisees within the Bhc system.