How is the MF Development Fee calculated for a Bhc Master Franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
licenses and/or permits to carry out the business activities contemplated by this Agreement.
4. INITIAL AND ON-GOING PAYMENTS BY MASTER FRANCHISEE
4.1 MF Development Fee and Licensing Fee for BHC Restaurants.
When Master Franchisee signs this Agreement, Master Franchisee must pay Franchisor the sum of USD Forty Thousand Dollars (USD $40,000) multiplied by the number single unit BHC Restaurant as a "MF Development Fee" for Franchisor granting Master Franchisee the exclusive right to open the number of BHC Restaurants specified in the Development Schedule. The MF Development Fee is computed by multiplying the number of BHC Restaurants by the Initial Franchisee Fee for a single unit BHC Restaurant of USD Forty-Thousand Dollars ($40,000). The MF Development Fee is not refundable. The MF Development Fee (and all other payments to Franchisor for goods or services received from Franchisor before Master Franchised BHC Restaurant
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the MF Development Fee is calculated by multiplying the number of single-unit Bhc Restaurants a Master Franchisee is granted the exclusive right to open by USD $40,000. This fee compensates Bhc for granting the Master Franchisee the exclusive right to open a specified number of Bhc Restaurants, as outlined in the Development Schedule.
For example, if a Master Franchisee is granted the right to open 10 Bhc Restaurants, the MF Development Fee would be USD $400,000 (10 restaurants x USD $40,000). This fee is not refundable and is due in full when the Master Franchise Agreement is signed, payable via cashier's check, money order, or wire transfer.
It's important to note that the Initial Franchise Fee is considered fully earned by Bhc upon payment. This means that even if the Master Franchisee does not ultimately open all of the restaurants specified in the Development Schedule, the MF Development Fee will not be refunded. This is a common practice in franchising, as the fee compensates the franchisor for the grant of exclusive development rights and the initial support provided to the franchisee.