Under what condition can Bhc impose an additional assessment upon franchisees for special designated advertising or promotional activities?

According to Bhc's 2025 Franchise Disclosure Document, Bhc may impose an additional assessment upon affected franchisees for special designated advertising or promotional activities on a regional or system-wide basis. However, this is contingent upon two-thirds of all affected franchised Bhc Restaurants agreeing to such additional assessment through an affirmative vote. This condition applies to both franchisees and master franchisees.

This means that Bhc cannot unilaterally decide to implement additional advertising fees without the consent of a significant portion of its franchisees. This provides a level of protection for franchisees, ensuring that they have a voice in decisions that could impact their financial obligations. The requirement for a two-thirds majority suggests that Bhc values the input of its franchisees and aims to build consensus before implementing significant changes to advertising and promotional strategies.

For a prospective Bhc franchisee, this condition is an important safeguard. It ensures that they will not be subject to arbitrary or unexpected increases in advertising fees without the support of their fellow franchisees. This can contribute to a more stable and predictable financial environment for franchisees, as they have some control over additional assessments for advertising and promotional activities. Franchisees should engage with the Bhc franchisee community to understand their perspectives on advertising and promotion to make informed decisions when such votes occur.

It is important for prospective franchisees to inquire about the historical frequency and amounts of such additional assessments, as well as the types of advertising and promotional activities that have been funded through these assessments. Understanding the past practices of Bhc in this area can provide valuable insights into the potential future financial obligations and the effectiveness of the advertising and promotional strategies employed by the franchise.