What is the maximum amount that Bhc requires franchisees to spend on advertising?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
otional purposes.
(xiii) In 2024, we neither collected nor expended any Marketing and Promotion Fees.
(xiv) We require you, your Affiliate Franchisee, or your Subfranchisees to spend at least $10,000 to $13,000 on the initial opening advertising and promotion event in connection with the opening of a Master Franchised BHC Restaurant sometime during the first 60 days after a Master Franchised BHC Restaurant opens (see section 4.4(c) of the MFA). Not later than 75 days after the Opening Date, you and your Subfranchisees must provide us with a report itemizing your expenditures on the initial opening advertising and promotion of a Master Franchised BHC Restaurant. If you fail to meet the initial opening advertising and promotion, you will be required to add the shortage toward the Marketing and Promotion Fee.
(xv) Also, beginning the 3rd full calendar month after a Master Franchised BHC Restaurant opens for business, we require that you, your Affiliate Franchisee, and your Subfranchisees spend at least 1% of your, your Affiliate Franchisee's, or your Subfranchisees' annual Gross Revenue during the periods of January 1 through December 31 on the local advertising and promotion of your or your Subfranchisee's BHC Restaurant using marketing and promotional materials pre-approved or otherwise authorized in writing by us ("Local Advertising") (see section 4.4(d)) of the MFA). You must submit to us a Local Advertising plan which details the Local Advertising for the next 12-month period for our approval. Within thirty (30) days after the end of each of the above-mentioned periods, we will provide a template to you and you must submit to us, a fully completed marketing report for the immediately preceding concluded period in form and substance specified by us, including evidence to verify such expenditure during such period.
(xvi) On a regional and system-wide basis, we may impose an assessment on all affected BHC franchisees for special advertising or promotional activities if franchisees owning two-thirds of all affected franchised BHC Resta
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, And Training (FDD pages 29–38)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees are required to spend a minimum of $10,000 to $13,000 on the initial opening advertising and promotion event within the first 60 days after opening their Master Franchised Bhc Restaurant. This expenditure is a one-time requirement tied to the restaurant's opening. Franchisees must provide Bhc with a report itemizing these expenditures within 75 days of the opening date. Failure to meet this initial advertising spend requires the franchisee to add the shortage amount to the Marketing and Promotion Fee.
In addition to the initial advertising spend, franchisees must spend at least 1% of their annual Gross Revenue on local advertising and promotion, starting from the third full calendar month after opening. This ongoing local advertising must use marketing and promotional materials pre-approved by Bhc. Franchisees are required to submit a Local Advertising plan detailing their advertising activities for the next 12-month period for Bhc's approval. They must also provide a marketing report, including evidence of expenditure, within thirty days after the end of each period.
Bhc may also impose an assessment for special advertising or promotional activities on a regional and system-wide basis. However, this assessment requires the agreement of franchisees owning two-thirds of all affected franchised Bhc Restaurants, confirmed in writing by each franchisee. While the FDD specifies minimum advertising spends, it does not explicitly state a maximum amount that Bhc requires franchisees to spend on advertising. Therefore, the maximum expenditure would depend on the franchisee's gross revenue and any agreed-upon assessments for special advertising activities.
Prospective franchisees should clarify with Bhc the potential for additional advertising requirements or assessments beyond the stated minimums. Understanding the full scope of potential advertising expenses is crucial for accurate financial planning. Franchisees should also inquire about the approval process for local advertising materials and the level of control Bhc exerts over advertising strategies.