What is the Master Franchisee's obligation regarding cooperation with Bhc representatives during reviews and inspections?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
chisee must reimburse Franchisor for the cost of having
Master Franchisee's books and records examined or audited (this remedy will be in addition to any other rights or remedies Franchisor has under this Agreement or otherwise, including Franchisor's right to terminate this Agreement).
(c) Master Franchisee must, and ensure Subfranchisees, fully cooperate in permitting Franchisor's representatives to access Master Franchised BHC Restaurant (or any other facility from which Master Franchisee sells BHC Products or any other offices relating to Master Franchisee's conduct of the Master Franchise Business) during normal business hours to conduct reviews and inspections, and to render such assistance as Franchisor's representatives may reasonably request. Upon notice from Franchisor or Franchisor's representatives, Master Franchisee must immediately begin such steps as may be necessary to correct any deficiencies noted during any such inspection. Franchisor's representatives may re-inspect Master Franchised BHC Restaurant (or other facility, if applicable) to ensure noted deficiencies have been corrected. If the deficiencies have not been corrected by the time of the initial reinspection, Franchisor's representatives may make additional re-inspections thereafter until noted deficiencies have been corrected or deem the Master Franchisee to be in material breach. Master Franchisee shall be responsible for all accommodation, transportation, meals, daily allowances, and other costs and expenses for the Franchisor's personnel in connection with such re-inspections.
8.11 Compliance with Laws.
- (a) Master Franchisee must, and ensure Subfranchisees, always (i) operate the BHC Restaurant and the Franchised Business in compliance with all applicable laws, rules, and regulations of applicable government authorities, (ii) comply with all applicable wage, hour and other laws and regulations of federal, state, or local governments, (iii) prepare and file all necessary tax returns, and (iv) pay promptly all taxes imposed upon Master Franchisee or upon Master Franchisee's business or property.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee has specific obligations regarding cooperation with Bhc representatives during reviews and inspections. The Master Franchisee must ensure that they and their Subfranchisees fully cooperate with Bhc representatives. This cooperation includes allowing access to the Master Franchised Bhc Restaurant, any facilities where Bhc products are sold, or any offices related to the Master Franchise Business during normal business hours for reviews and inspections. The Master Franchisee must also provide any assistance reasonably requested by Bhc's representatives.
Upon receiving notice from Bhc or its representatives, the Master Franchisee is required to immediately take steps to correct any deficiencies identified during the inspection. Bhc's representatives may conduct re-inspections to ensure that the noted deficiencies have been corrected. If the deficiencies are not corrected by the time of the initial re-inspection, Bhc's representatives may conduct additional re-inspections until the deficiencies are corrected or until Bhc deems the Master Franchisee to be in material breach of the agreement.
The Master Franchisee is financially responsible for all costs associated with these re-inspections. This includes accommodation, transportation, meals, daily allowances, and other expenses incurred by Bhc's personnel. This financial responsibility underscores the importance of addressing and correcting any identified deficiencies promptly to avoid repeated inspections and additional costs. Bhc also has the right to send representatives at reasonable intervals at any time (announced or unannounced) during normal business hours to review and inspect the Master Franchisee's operations, business methods, service, management, and administration to ensure compliance with the agreement and system standards.