When are the Royalties due and payable for Bhc franchises on a monthly basis?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Franchise Royalty and Subfranchise Royalty are collectively referred to as "Royalties". Royalties are due and payable on a monthly basis on the following 5th day for the previous month (unless that day is a banking holiday, in which case the Royalties are due and payable on the next business day). Royalties will be calculated on the Gross Revenues received during the prior month. Monthly payments of Royalties are to be accompanied by a revenue report in the form prescribed by Franchisor.
- (d) Monthly payments of Royalties are to be accompanied by a revenue report in the form prescribed by Franchisor. Notwithstanding the preceding sentence, Franchisor reserves the right, upon ninety (90) days' written notice to Master Franchisee, to require Master Franchisee to pay the Royalty Fee on a more frequent basis, including monthly or weekly. In addition, upon ninety (90) days' written notice to Master Franchisee, Franchisor reserves the right to require Master Franchisee to sign electronic transfer of funds authorizations and other documents as Franchisor periodically designates or approves, to authorize Master Franchisee's bank to transfer, either electronically or through some other method of payment Franchisor or its Affiliates designate or approve, directly to Franchisor's or its Affiliates' account and to charge Master Franchisee's account all amounts due to Franchisor or its Affiliates from Master Franchisee. Master Franchisee's authorization will permit Franchisor or its Affiliates to designate the amount to be transferred from Master Franchisee's account. Master Franchisee must maintain a balance in its account sufficient to allow Franchisor and/or its Affiliates to collect the amounts owed when due. Master Franchise is responsible for any penalties, fines or other similar expenses associated with the transfer of funds described in this paragraph.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Royalties are due and payable on the 5th day of each month for the previous month's gross revenues. If the 5th falls on a banking holiday, the Royalties are due on the next business day. Franchisees must also submit a revenue report in the format prescribed by Bhc along with their Royalty payments each month.
This means that as a Bhc franchisee, you need to calculate your gross revenues for each month and remit 4.5% of that amount to Bhc by the 5th of the following month. You also need to ensure that you have the appropriate revenue report completed and submitted along with your payment. This is a fairly standard practice in franchising, where royalties are typically paid monthly based on the previous month's sales.
Bhc also retains the right to change the frequency of Royalty payments to weekly or monthly with a 90-day written notice to the Master Franchisee. Additionally, Bhc can require Master Franchisees to authorize electronic fund transfers for Royalty payments with 90 days written notice. This authorization would allow Bhc to directly debit the Master Franchisee's account for the amounts due, and the Master Franchisee is responsible for maintaining sufficient funds in the account to cover these payments and any associated penalties.