Does Bhc provide material benefits to franchisees based on their use of designated Approved Suppliers?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
gh we may do so in the future.
Material Benefits Based on Franchisee Purchases
We do not provide material benefits to you, your Affiliate Franchisee, or your Subfranchisees based on your, your Affiliate Franchisee's, or your Subfranchisees' use of designated Approved Suppliers but doing so is one of your obligations under the MFA and we may either require you, your Affiliate Franchisee and your Subfranchisees to purchase replacement products from a designated Approved Supplier or terminate your MFA if you purchase from unapproved sources in violation of your MFA.
Ownership Interest By an Officer of the Franchisor
None of our officers owns an interest in any supplier.
Required Purchases
The estimated proportion of your required purchases from Approved Suppliers and leases by you to all purchases from Approved Suppliers and lease by you of goods and services in establishing your Master Franchise Business is 4% to 5% and operating your Master Franchise Business is 20% to 35%.
Item 9: Franchisee's Obligations
MASTER FRANCHISEE'S OBLIGATIONS
**This table lists your principal obligations under the Multi-Unit Master Franchise Agreement and Other Agreements.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 25–28)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc does not provide material benefits to franchisees, Affiliate Franchisees, or Subfranchisees based on their use of designated Approved Suppliers. However, franchisees are obligated to use approved suppliers under the Master Franchise Agreement (MFA). Failure to comply with this requirement could lead to mandated purchases from approved sources or even termination of the MFA.
Bhc may negotiate prices for numerous products for the benefit of the entire Bhc system, and these volume discounts will be passed on to franchisees. Bhc retains the right to create a purchasing or distribution cooperative in the future, which franchisees would be required to participate in.
The estimated proportion of required purchases from Approved Suppliers for establishing a Master Franchise Business is 4% to 5%, while operating the business requires 20% to 35% of purchases from Approved Suppliers. This means a significant portion of a franchisee's supplies must come from approved sources to maintain brand consistency and quality control within the Bhc system.