To whom are the Royalty Fees from Subfranchised Bhc Restaurants paid?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee from Affiliate Franchised BHC Restaurants | 4.5% of Gross Revenue (2)(3) | Payable monthly on the following 5th days 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 every two (2) weeks. | Paid to us. We require payment by electronic funds transfer ("EFT"). We reserve the right, upon 90 days' written notice to you, to require you to pay Royalty Fees on a more frequent basis, including monthly or weekly |
| Royalty Fee from Subfranchised BHC Restaurants | 4.5% Gross Revenues of Subfranchised BHC Restaurants. (3) | Same date as the Royalty Fee from Affiliate Franchised BHC Restaurants | Paid to us. We require payment by electronic funds transfer ("EFT"). We reserve the right, upon 90 days' written notice to you, to require you to pay Royalty Fees on a more frequent basis, including monthly or weekly The maximum royalty you can charge Subfranchisee is 7% of Gross Revenues. |
Source: Item 6 — Other Fees (FDD pages 12–18)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the royalty fees from subfranchised Bhc restaurants are paid to the franchisor. Specifically, subfranchisees must pay a royalty fee of 4.5% of gross revenues derived from their restaurants. The master franchisee cannot charge subfranchisees more than 7% of gross revenues. These fees are payable monthly, typically on the 5th day of the following month, unless that day is a banking holiday, in which case the royalties are due on the next business day.
Bhc requires that these royalty payments be made via electronic funds transfer (EFT). However, Bhc retains the right to change the payment frequency to monthly or weekly, provided they give the franchisee 90 days' written notice. This flexibility allows Bhc to adjust payment schedules as needed, potentially based on the financial performance or operational needs of the franchise system.
For a prospective Bhc franchisee, this means understanding the specific due dates and methods for royalty payments is crucial. Franchisees should also be aware of the potential for Bhc to modify the payment schedule with sufficient notice. Additionally, franchisees should note that the royalty they charge to subfranchisees is capped at 7% of gross revenues, ensuring compliance with the franchise agreement.