What is the minimum number of Bhc Restaurants that the Master Franchisee must secure, establish, and operate through Subfranchisees in the Development Area, according to the Initial Development Schedule?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Products at venues other than BHC Restaurants and through other channels of distribution anywhere, including within Master Franchisee's Territory.
3.6 Promotion and Development of Master Franchise Business.
Master Franchisee undertakes to and guarantees to secure, establish and operate, through its Subfranchisees under Subfranchise Agreements, not less than the cumulative number of BHC Restaurants (including Franchised BHC Restaurants) in the Development Area by each of the dates specified in the "Initial Development Schedule" (attached hereto as Exhibit 1).The required BHC Restaurant quotas listed in the Initial Development Schedule are each an "Initial Development Quota" and are collectively referred to as the "Initial Development Quotas." As further described in section 3.1, Master Franchisee must establish and operate at least one (1) Franchised BHC Restaurant within the Development Area pursuant to separate Subfranchise Agreements before Master Franchisee may grant subfranchises to third parties for the establishment and operation of Subfranchised BHC Restaurants within the Development Area. If Master Franchisee fails to meet any of the Initial Development Quotas by the date specified in the
Initial Development Schedule, Franchisor shall have the right to collect from Master Franchisee an amount up to the then-current MF Development Fee Master Franchisee is required to pay Franchisor pursuant to section 4.1(b) for each BHC Restaurant short of the applicable Initial Development Quota. Master Franchisee shall pay to Franchisor any such amount within seven (7) days of receipt of Franchisor's request for payment.
3.7 Extent of Grant.
(a) Master Franchisee understands and agrees that Master Franchisee is licensed hereby only for the operation of the Franchised Business and only within Master Franchisee's Development Area.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee must secure, establish, and operate a minimum cumulative number of Bhc Restaurants in the Development Area through Subfranchise Agreements, as specified in the Initial Development Schedule attached as Exhibit 1. These required restaurant quotas are referred to as "Initial Development Quotas."
The Master Franchisee must first establish and operate at least one Franchised Bhc Restaurant within the Development Area through a separate Subfranchise Agreement before granting subfranchises to third parties. If the Master Franchisee fails to meet any of the Initial Development Quotas by the dates listed in the Initial Development Schedule, Bhc has the right to collect a fee for each restaurant short of the quota, up to the then-current MF Development Fee required in section 4.1(b).
For compliance purposes, only Bhc Restaurants that are actually open and continuously operating as of a specific date will count towards the required number in the Development Schedule. Bhc may defer a scheduled opening date if it determines that the Master Franchisee made a diligent effort to open a restaurant but was unable to do so due to reasons beyond their reasonable control.