What is the Master Franchisee obligated to do regarding fees charged to Subfranchisees for Bhc?
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, a Master Franchisee is obligated to adhere to specific guidelines regarding fees charged to Subfranchisees. The Master Franchisee must only charge Subfranchisees fees, payments, and other considerations that have been established or approved by Bhc in writing.
Specifically, the Master Franchisee cannot charge a Subfranchisee a royalty fee exceeding seven percent (7%) of the Subfranchisee's BHC Restaurant's Gross Revenue. This restriction ensures that Subfranchisees are not overburdened with excessive royalty fees, which could hinder their profitability and operational success.
Furthermore, all Subfranchise Agreements and Other Agreements must comply with and be no less onerous than the terms outlined in the Master Franchise Agreement, unless otherwise provided or approved in writing by Bhc. This provision aims to maintain consistency and fairness across all franchise operations within the BHC system, safeguarding the brand's integrity and the interests of all parties involved.