What sections of the Bhc Multi-Unit Master Franchise Agreement detail the master franchisee's obligations for pre-opening purchases and leases?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ible for such inspection fee of USD$600, all accommodation, transportation, meals, daily allowances, and other costs and expenses for the Franchisor's personnel in connection with such visits on site but up to three times per Franchised BHC Restaurant only.
- (g) Unless otherwise agreed to in writing by Master Franchisee and Franchisor, Master Franchisee has the sole responsibility for locating, securing, and obtaining suitable premises for the Franchised BHC Restaurant. Master Franchisee and Master Franchisee's landlord will be required by Franchisor to execute an addendum to Master Franchisee's lease (or other written agreement or written understanding incorporated in, or attached as a rider to, the lease) that (i) grants Franchisor an option to assume Master Franchisee's position as lessee under the lease for the Franchised BHC Restaurant premises if Master Franchisee is in material breach of either the lease for the Franchised BHC Restaurant premises (including an obligation of the landlord to notify Franchisor if Master Franchisee is in such breach) or this Agreement, (ii) grants Franchisor the right to assign the lease to a bona fide Master Franchisee of the System after assuming the lease, and (iii) requires the landlord to fully cooperate with Franchisor in completing de-identification of the Franchised BHC Restaurant if this Agreement is terminated or expires without being renewed and Franchisor does not exercise its option to assume the lease for the Franchised BHC Restaurant premises. The Addendum to Lease is attached as Exhibit 5.
(h) Franchisor has the right to regularly inspect Master Franchised BHC Restaurant and any other site where Master Franchisee conducts the Franchised Business.
7.3 Equipment and Inventory.
- (a) Throughout the term of this Agreement, Master Franchisee shall, and ensure that Subfranchisees shall, only purchase, and maintain equipment and inventory as needed to meet reasonably anticipated consumer demand of the BHC Products. Master Franchisee shall, and shall ensure that Subfranchisees shall also purchase and sell ancillary products, which may include books, specialty foods, packaged foods, books, hats, t-shirts, and novelty items, as we periodically specify, for sale at your BHC Restaurant ("Ancillary Products"). To ensure highest degree of consistency, service, and quality, Master Franchisee must practice and conform to the standards, operating procedures, specifications, and rules Franchisor has established for the operation of a BHC Restaurant, as modified by Franchisor from time to time) including specifications as to ingredients, brand names, preparation, and presentation ("Standards"). Master Franchisee must purchase all products that Master Franchisee offers from the Franchised BHC Restaurant, including products which bear any of the Marks, solely and exclusively from Franchisor, or Franchisor's designated supplier.
- (b) Before opening a BHC Restaurant, Master Franchisee and Subfranchisees must purchase opening inventory of merchandise and supplies that includes certain proprietary products that Master Franchisee must purchase from Franchisor and Franchisor's affiliates.
Source: Item 9 — Franchisee's Obligations (FDD pages 28–29)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the master franchisee has several obligations regarding pre-opening purchases and leases, as detailed in the Multi-Unit Master Franchise Agreement. The master franchisee is solely responsible for locating, securing, and obtaining suitable premises for the franchised Bhc Restaurant, unless otherwise agreed upon in writing with Bhc.
The master franchisee and their landlord must execute an addendum to the lease, granting Bhc an option to assume the lease if the master franchisee materially breaches the lease or the agreement. This addendum also gives Bhc the right to assign the lease to another franchisee and requires the landlord to cooperate with Bhc in de-identifying the restaurant if the agreement terminates and Bhc does not assume the lease.
Furthermore, the master franchisee must locate and secure premises acceptable to Bhc within four months of the agreement's effective date. They must submit site information to Bhc for review and reimburse Bhc for any costs incurred during the review process. If Bhc does not approve a proposed site within a specified timeframe, the site is deemed rejected, and the master franchisee must propose an alternative location. Bhc may assist in locating or evaluating a site for a reasonable fee, but is not obligated to do so. If a suitable site is not found within four months, Bhc has the right to cancel the agreement.