Is the Bhc Master Franchisee required to receive fees from all Master Franchised BHC Restaurants within the Development Area?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
are defined below).
Under the MFA, you will be granted the right and license: (i) to grant subfranchises for the establishment and operation of BHC Restaurants, as defined below, within the Development Area ("Development Rights") to third party subfranchisees that meet our requirements ("Subfranchisees") by entering into Subfranchise Agreements (as defined below) ("Subfranchised BHC Restaurants"); and (ii) to directly own and operate through an affiliate of the Master Franchisee ("Affiliate Franchisee") ("Affiliate Franchised BHC Restaurants") within the Development Area once opened, and to support, and receive fees from, as applicable, all Master Franchised BHC Restaurants within the Development Area once opened ("Operating Rights").
Source: Item 1 — The Franchisor, And Any Parents, Predecessors, And Affiliates (FDD pages 7–10)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, as a Master Franchisee, you have the right to support and receive fees from all Master Franchised Bhc Restaurants within your designated Development Area once they are open. This encompasses both Affiliate Franchised Bhc Restaurants, which are owned and operated by your affiliate, and Subfranchised Bhc Restaurants, which are operated by third-party subfranchisees.
This arrangement means that your revenue as a Master Franchisee is directly tied to the success and operation of all Bhc restaurants within your territory, regardless of whether they are directly operated by you or by subfranchisees. This provides a strong incentive for you to support and develop both types of franchise locations.
The FDD defines "Master Franchised BHC Restaurants" as both Affiliate Franchised and Subfranchised locations that operate under your Development and Operating Rights. This clarifies that your right to receive fees extends to all restaurants operating under your master franchise agreement, ensuring you benefit from the overall growth of the Bhc brand within your Development Area. This structure is common in master franchising, where the master franchisee acts as an area developer and receives ongoing compensation based on the performance of all units within their territory.