What is Master Franchisee's obligation regarding purchasing equipment and inventory for Bhc restaurants?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Throughout the term of this Agreement, Master Franchisee shall, and ensure that Subfranchisees shall, only purchase, and maintain equipment and inventory as needed to meet reasonably anticipated consumer demand of the BHC Products.
Master Franchisee shall, and shall ensure that Subfranchisees shall also purchase and sell ancillary products, which may include books, specialty foods, packaged foods, books, hats, t-shirts, and novelty items, as we periodically specify, for sale at your BHC Restaurant ("Ancillary Products").
To ensure highest degree of consistency, service, and quality, Master Franchisee must practice and conform to the standards, operating procedures, specifications, and rules Franchisor has established for the operation of a BHC Restaurant, as modified by Franchisor from time to time) including specifications as to ingredients, brand names, preparation, and presentation ("Standards").
Master Franchisee must purchase all products that Master Franchisee offers from the Franchised BHC Restaurant, including products which bear any of the Marks, solely and exclusively from Franchisor, or Franchisor's designated supplier.
(b) Before opening a BHC Restaurant, Master Franchisee and Subfranchisees must purchase opening inventory of merchandise and supplies that includes certain proprietary products that Master Franchisee must purchase from Franchisor and Franchisor's affiliates.
(c) Franchisor will provide Master Franchisee with a list of approved manufacturers, suppliers, and distributors ("Approved Suppliers List") and approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies and other items or services necessary to operate the BHC Restaurant ("Approved Supplies List").
The Approved Supplies List may specify a required manufacturer or supplier of a specific product or piece of equipment.
Franchisor reserves the right to designate a required source of supply for certain products and supplies, and Franchisor or an affiliate may be a required source.
The lists also may include other specific products without reference to a particular manufacturer or supplier, or they may set forth the specifications and/or standards for other approved products.
Franchisor may revise the Approved Suppliers List and Approved Supplies List.
Franchisor gives Master Franchisee the approved lists as Franchisor deems advisable.
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 the purchase and maintenance of equipment and inventory. Throughout the term of the agreement, the Master Franchisee must ensure that they and their subfranchisees only purchase and maintain the equipment and inventory needed to meet the reasonably anticipated consumer demand for Bhc products. They must also purchase and sell ancillary products such as books, specialty foods, packaged foods, hats, t-shirts, and novelty items as specified by Bhc.
To maintain consistency, service, and quality, the Master Franchisee must adhere to Bhc's standards, operating procedures, specifications, and rules, including those related to ingredients, brand names, preparation, and presentation. All products offered at the Bhc restaurant, especially those bearing Bhc's marks, must be purchased exclusively from Bhc or its designated suppliers. Before opening a Bhc restaurant, the Master Franchisee and subfranchisees must purchase an opening inventory of merchandise and supplies, including proprietary products, from Bhc and its affiliates.
Bhc will provide the Master Franchisee with an Approved Suppliers List and an Approved Supplies List, which include approved manufacturers, suppliers, and distributors, as well as approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies, and other necessary items. These lists may specify required manufacturers or suppliers for particular products or equipment, and Bhc reserves the right to designate a required source of supply for certain products and supplies, potentially including Bhc itself or its affiliates. Bhc may revise these lists as deemed advisable.