Are the payments made to Bhc or its affiliates refundable, as described in the estimated initial investment?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
D INITIAL INVESTMENT: (Master Franchise Business)**
| Type of Expenditure (1) | Amount** | Method of Payment | When Due | To Whom Payment Is to Be Made |
|---|---|---|---|---|
| MF Development Fee | $200,000 | Lump sum; | At signing of | Franchisor |
| (2) | non-refundable | MFA | ||
| Initial Deposit (3) | $100,000 | Lump sum; refundable at expiration of MFA | At signing of MFA | Franchisor |
| Office Equipment and (4) Supplies | $0 to $5,000 | As Incurred | When Incurred | Various Suppliers |
| Business Office (5) | $0 to $15,000 | As Incurred | As Incurred | Lessor and Various Suppliers |
| Storage and Product Delivery Expenses (6) | $0 to $5,000 | As Incurred | As Incurred | Various Suppliers |
| Initial Training Fee (7) | $8,000 | L |
Source: Item 7 — Estimated Initial Investment: (FDD pages 18–25)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, payments made to Bhc or its affiliates are generally non-refundable, with a few exceptions. Specifically, the MF Development Fee, which amounts to $200,000, and the Initial Training Fee of $8,000 are non-refundable. However, the initial deposit is refundable at the expiration of the MFA. The document also clarifies that whether payments made to third parties are refundable depends on the franchisee's arrangements with those third parties.
For a prospective Bhc master franchisee, this means that a significant portion of the initial investment, particularly the MF Development Fee and the Initial Training Fee, is non-recoverable even if the franchisee fails to open a Master Franchised BHC Restaurant. This represents a substantial financial risk. The initial deposit of $100,000 is refundable at the expiration of the MFA.
It is important for potential Bhc franchisees to carefully review the terms and conditions of all agreements with third-party suppliers to understand the refund policies associated with those payments. Given the non-refundable nature of certain fees paid to the franchisor, prospective franchisees should conduct thorough due diligence and seek professional advice before investing in a Bhc franchise.