What is the Master Franchisee's obligation regarding fees charged to Bhc Subfranchisees?
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 restricted in the fees they can charge to Subfranchisees. Specifically, the Master Franchisee can only charge fees, payments, or other forms of consideration to Subfranchisees if these are established or approved in writing by Bhc.
Furthermore, the Master Franchisee is explicitly prohibited from charging a royalty fee exceeding 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 impact their profitability and operational sustainability.
In addition to these fee restrictions, Bhc mandates that 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 aims to maintain consistency and fairness across all franchise operations within the network, safeguarding the interests of both Bhc and its Subfranchisees.