Who is responsible for reimbursing Bhc for costs associated with testing a potential supplier?

According to Bhc's 2025 Franchise Disclosure Document, as a condition of approval for a new supplier, either the franchisee or the potential supplier is responsible for reimbursing Bhc for all costs and expenses associated with testing. These costs include travel and lodging expenses incurred by Bhc when they deem it necessary to visit the supplier's facilities. This applies to both franchisees and master franchisees.

This requirement means that if a Bhc franchisee wants to use a new supplier, they or the supplier must be prepared to cover the costs of Bhc's testing and inspection. This could include covering travel and accommodation for Bhc personnel to visit the supplier's facilities. The reimbursement is a condition of approval, so failure to pay could result in the supplier not being approved.

This policy allows Bhc to maintain control over its supply chain and ensure quality standards are met without directly bearing the financial burden of supplier evaluations. For a prospective franchisee, this highlights the importance of carefully considering the potential costs associated with proposing new suppliers and discussing this with the potential supplier beforehand. It is also important to note that Bhc reserves the right to approve suppliers and is not required to approve an excessive number of suppliers if it could lead to higher costs for franchisees.