Do the real estate estimates for Bhc include tenant improvement allowances?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
material and labor costs in the Affiliate Franchisee's area. These estimates are for new leasehold improvement and do not include tenant improvement allowances, if any. If the Affiliate Franchisee remodels an existing facility, we expect the Affiliate Franchisee's remodeling costs to be lower depending on the condition of the premises. If the Affiliate Franchisee chooses to purchase the land or building, the Affiliate Franchisee will incur substantial additional costs and expenses, which we cannot meaningfully estimate.
- (3) Leasehold improvement / Remodeling. Leasehold improvement / remodeling costs, including floor coverings, wall treatments, counters, ceilings, painting, window coverings, electrical, carpentry, and similar work, and contractor's fees depend on the site's condition, location, and size; the demand for the site among prospective lessees; the site's previous use; the build-out required to conform the site for the Affiliate Franchisee's Franchised BHC Restaurant;
Source: Item 7 — Estimated Initial Investment: (FDD pages 18–25)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the real estate estimates for new leasehold improvements do not include tenant improvement allowances. Bhc indicates that if a franchisee remodels an existing facility, the remodeling costs are expected to be lower, depending on the condition of the premises.
The FDD notes that leasehold improvement costs depend on factors such as the site's condition, location, size, demand, previous use, and the build-out required to conform the site for a Bhc restaurant. These costs also depend on any leasehold improvement or other allowances the landlord grants. The estimates included in the table reflect the average deduction provided by landlords for tenant improvements and other allowances.
Prospective Bhc franchisees should inquire about the availability of tenant improvement allowances during lease negotiations, as these allowances can significantly reduce initial investment costs. Franchisees should also consider the condition of potential sites, as remodeling an existing facility may lower costs compared to new leasehold improvements. It is important to factor in all potential real estate costs and allowances when evaluating the financial feasibility of a Bhc franchise.