Must potential subfranchisees and Bhc Restaurants meet the franchisor's minimum requirements?

According to Bhc's 2025 Franchise Disclosure Document, as a master franchisee, you are required to conduct an approval process, including a background check, to ensure that each potential subfranchisee and each potential Bhc Restaurant meets all of Bhc's then-current minimum requirements for new subfranchisees and new Bhc Restaurants. These requirements may be amended, replaced, or supplemented by Bhc from time to time. Bhc also retains the right to approve or disapprove any or all potential subfranchisees and potential Bhc Restaurants at its sole discretion, with written notice to you.

This means that as a master franchisee, you have the responsibility to vet potential subfranchisees and restaurant locations to ensure they align with Bhc's standards. This process includes conducting background checks and verifying that all minimum requirements are met. However, Bhc maintains ultimate control over the approval process, allowing them to reject any subfranchisee or restaurant location even if it meets your initial criteria.

This dual-layered approval process ensures that all subfranchisees and restaurant locations meet Bhc's standards, protecting the brand's reputation and consistency. It also gives Bhc the final say in who can operate under their brand, even if you, as the master franchisee, have already approved them. This highlights the importance of understanding Bhc's specific requirements and approval criteria to avoid potential conflicts or delays in the subfranchising process.