What waiting periods must be complied with before a prospective subfranchisee pays any consideration or signs a binding agreement for a Bhc Restaurant?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, you, your Affiliated Franchisee, and your Subfranchisees are responsible for complying with all applicable federal and state laws relating to the offer, sale, maintenance, default, termination and non-renewal of franchises and subfranchises, including the FTC Franchise Rule, state franchise registration and disclosure laws, state relationship laws and state business opportunity laws (collectively, "Franchise Laws"). Further, you are solely responsible for preparing, amending and annually updating a franchise disclosure document ("Subfranchise FDD") to use in offering and selling subfranchises for BHC Restaurants to prospective subfranchisees in accordance with all Franchise Laws (although, upon your request, we will provide relevant information about ourselves and our business to include in your Subfranchise FDD), registering your Subfranchise FDD with the states, as applicable, properly providing your Subfranchise FDD to us and to prospective subfranchisees and complying with all applicable waiting periods before a prospective subfranchisee pays any consideration to you or your Affiliates or signs a binding agreement, and requesting information from us to allow you to prepare, amend, update and register your FDD in a timely manner. Further, you also will be responsible for complying with all applicable federal, state and local laws and regulations relating to your importation, storage, sale and delivery of the Approved Supplies (as defined in Item 8), including the Products.
Source: Item 1 — The Franchisor, And Any Parents, Predecessors, And Affiliates (FDD pages 7–10)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a master franchisee is responsible for ensuring compliance with all applicable federal and state laws related to offering and selling subfranchises. This includes adhering to the FTC Franchise Rule, state franchise registration and disclosure laws, state relationship laws, and state business opportunity laws.
Specifically, the master franchisee must prepare, amend, and annually update a Subfranchise FDD for offering and selling Bhc subfranchises. This Subfranchise FDD must be registered with the states where required. The master franchisee is responsible for properly providing the Subfranchise FDD to both Bhc and prospective subfranchisees.
Crucially, the master franchisee must comply with all applicable waiting periods before a prospective subfranchisee pays any consideration or signs a binding agreement. The FDD does not specify the length of these waiting periods, as they vary based on applicable Franchise Laws. It is the master franchisee's responsibility to know and follow these laws. A prospective franchisee should consult with a legal expert to ensure compliance with all applicable waiting periods before accepting any payment or signing any agreements.