Must my Subfranchisees adhere to the approved supplier list for Bhc?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
You must, and ensure that your Affiliate Franchisee and your Subfranchisees: (i) advertise, sell, and serve all and only the products we authorize; (ii) purchase, and maintain inventory as needed to meet reasonably anticipated consumer demand of the BHC Products; and 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 a Master Franchised BHC Restaurant ("Ancillary Products"). To ensure highest degree of consistency, service, and quality, you must practice and conform to, and ensure that your Affiliate Franchisee and your Subfranchisees maintain and comply with, the standards, operating procedures, specifications, and rules we have established for the operation of a Master Franchised BHC Restaurant, as modified by us from time to time including specifications as to ingredients, brand names, preparation, and presentation ("Standards"). You and your Affiliate Franchise must purchase, and must ensure that your Subfranchisees only purchase, all products that your Affiliate Franchise and your Subfranchisee offer from a Master Franchised BHC Restaurant, including products which bear any of our trademarks, solely and exclusively from BHC, or our designated supplier.
For purposes of clarification, except as otherwise provided in the MFA or in writing by us, you and your Affiliate Franchisee must purchase all BHC Products from BHC, and your Subfranchisees shall purchase all BHC Products to be used and sold from their Master Franchised BHC Restaurants from BHC or our affiliates. You may not, and must ensure that your Subfranchisees do not, distribute, sell, resell, supply, license, sublicense, lease, rent, loan, market, provide access to, make available or transfer any Supplies to any third party.
Required Purchases of Goods or Services, including Computer and Point of Sale System
In order to ensure a uniform image and uniform quality of products and services throughout the System, you and your Affiliate Franchisee must maintain and comply with and must ensure that your Subfranchisees maintain and comply with our Standards.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 25–28)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Subfranchisees must adhere to the approved supplier list. As a Master Franchisee, you must ensure that your Subfranchisees comply with Bhc's standards, operating procedures, specifications, and rules, including purchasing all products exclusively from Bhc or its designated suppliers. This encompasses all products offered at the BHC Restaurant, especially those bearing Bhc's trademarks. Subfranchisees are prohibited from distributing, selling, or transferring any supplies to third parties.
To maintain uniformity and quality across the Bhc system, Subfranchisees must comply with the standards set by Bhc. This includes purchasing only authorized products and maintaining sufficient inventory to meet consumer demand. The approved supplier list may specify required manufacturers or suppliers for certain items, and Bhc reserves the right to designate a required source of supply for specific products.
If a Subfranchisee wishes to use alternative supplies or suppliers not yet approved by Bhc, they must first notify Bhc in writing and submit the necessary information and samples for approval. Bhc will then provide written approval or disapproval within a reasonable time period, typically 30 days. Approval depends on factors such as product quality, delivery reliability, service standards, and the supplier's willingness to meet Bhc's criteria. Bhc may also receive payments or rebates from approved suppliers based on purchases made by franchisees and Subfranchisees.