Under what conditions is the Initial Deposit refundable after the expiration or termination of the Bhc Franchise Agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
and payable in full, by cashier's check or money order or wire transfer to Franchisor when Master Franchisee signs this Agreement. The Initial Franchise Fee is fully earned by Franchisor when paid.
4.2 Initial Deposit.
When Master Franchisee signs this Agreement, Master Franchisee must pay Franchisor USD Twenty Thousand (USD $20,000) per BHC Restaurant as a deposit fee (the "Deposit"). Deposit is due and payable in full, by cashier's check or money order or wire transfer to Franchisor when Master Franchisee signs this Agreement. The purpose of the Deposit is to secure against non-payment of Master Franchisee's obligations under this Agreement. The Deposit must be paid in a lump sum and is refundable within sixty (60) days of the expiration or termination of this Agreement if and only if Master Franchisee is in full compliance with Master Franchisee's obligations in this Agreement, including, without limitation, Master Franchisee's post termination obligations set forth in section 11.2 and 15.1 thereof. If any amount is deducted from the Deposit b
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the initial deposit, which is USD $20,000 per Bhc Restaurant, is potentially refundable. However, this refund is contingent upon the franchisee's full compliance with all obligations outlined in the Master Franchise Agreement.
Specifically, the deposit will only be refunded within sixty (60) days of the expiration or termination of the agreement if the franchisee has fully met all obligations. These obligations include, but are not limited to, the post-termination obligations detailed in sections 11.2 and 15.1 of the agreement. This means that even after the franchise agreement ends, the franchisee must continue to adhere to certain requirements to be eligible for the deposit refund.
Bhc may deduct amounts from the initial deposit for fees owed to them. If any amount is deducted, the franchisee is responsible for replenishing the deposit back to USD $20,000 per Bhc Restaurant within ten (10) business days of each deduction. This ensures that the deposit remains at the full required amount throughout the term of the agreement.