What rights does Bens Soft Pretzels retain that are not expressly granted to the franchisee?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates retain all rights that are not expressly granted to you under this Agreement. Further, we and our affiliates may, among other things, on any terms and conditions we deem advisable, without compensation to any franchisee, and without granting you any rights therein:
- (i) establish and/or license others to establish franchised or company-owned or affiliate-owned Stores at any location, regardless of the proximity of such stores to your Designated Area;
- (ii) merge with, acquire or become associated with ("Merger/Acquisition Activity") any businesses or stores of any kind (including those in competition with BEN'S SOFT PRETZELS) under other systems and/or marks, which businesses and stores may convert to or operate under the Trademarks and may offer or sell menu items, products and services that are the same as or similar to the Menu Items offered at or from the Store, and which may be located anywhere; and
- (iii) sell and distribute for ourselves and/or license others to sell and distribute through franchised businesses or any other method of distribution menu items the same as or different from the Menu Items offered under the System, and which are offered and distributed under marks different than the Trademarks.
We and our affiliates also have the right to offer, sell or distribute any proprietary items or other products or services associated with the System (now or in the future) or identified by the Trademarks, or any other trademarks, service marks or trade names through any distribution channels or methods, without compensation to any franchisee. The distribution channels or methods ("Alternative Methods of Distribution") include, without limitation, grocery stores, club stores, convenience stores, wholesale, business or industry locations (e.g. manufacturing site, office building), military installations, military commissaries or the Internet (or any other existing or future form of electronic commerce).
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, Bens Soft Pretzels and its affiliates retain all rights not expressly granted to the franchisee. This means Bens Soft Pretzels has broad authority over the brand and system. Specifically, Bens Soft Pretzels can establish or license others to establish franchised, company-owned, or affiliate-owned stores at any location, regardless of proximity to a franchisee's location. This could result in direct competition for a franchisee, even within their designated area.
Bens Soft Pretzels also has the right to engage in Merger/Acquisition Activity with any businesses or stores, including those that compete with Bens Soft Pretzels. These acquired businesses can then operate under the Bens Soft Pretzels trademarks and offer similar menu items, without any obligation to compensate existing franchisees. This clause gives Bens Soft Pretzels considerable flexibility to expand and evolve the brand, potentially in ways that directly impact franchisees.
Furthermore, Bens Soft Pretzels can sell and distribute menu items through any method of distribution, including through franchised businesses or other channels, under different trademarks. They can also distribute proprietary items or other products/services associated with the Bens Soft Pretzels system through various channels like grocery stores, club stores, convenience stores, or the Internet, without compensating franchisees. This allows Bens Soft Pretzels to diversify its revenue streams and reach customers through alternative methods, which could reduce the reliance on traditional franchise locations and impact a franchisee's sales.
For a prospective franchisee, these retained rights highlight the importance of understanding the potential for competition from both within and outside the Bens Soft Pretzels system. The franchisee's success is heavily dependent on Bens Soft Pretzels's strategic decisions regarding expansion, partnerships, and alternative distribution methods. Franchisees have no recourse for compensation as a result of these decisions.