Under what condition can Bhc require a more frequent payment schedule for Royalty Fees from Affiliate Franchised Bhc Restaurants?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 6: Other Fees
OTHER FEES
| 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. |
Source: Item 6 — Other Fees (FDD pages 12–18)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the standard payment schedule for Royalty Fees from Affiliate Franchised Bhc Restaurants is monthly, specifically on the 5th day of the following month for the previous month's revenues. However, Bhc retains the right to modify this payment schedule under certain conditions.
Bhc can require franchisees to pay Royalty Fees on a more frequent basis, including monthly or weekly, but only after providing 90 days' written notice. This means that a franchisee would have a three-month period to adjust their accounting and payment processes to accommodate the new schedule. The Royalty Fees are calculated on the Gross Revenues received during every two (2) weeks.
This provision allows Bhc to adapt its revenue collection practices as needed, potentially in response to a franchisee's financial performance or changes in the overall business environment. For a prospective franchisee, this highlights the importance of maintaining sufficient cash flow to meet potentially more frequent payment demands and understanding that the payment terms are subject to change with adequate notice.