Can Bhc develop other systems using the Bhc trademarks and grant franchises in those systems without providing any rights to existing Bhc franchisees?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
The license to use the Marks granted in the MFA is non-exclusive to you. We have and retain certain rights in the Marks including the following:
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- To grant other licenses for the use of the Marks in addition to those licenses already granted or to be granted to franchisees;
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- To develop and establish other systems using the Marks or other names or marks, and to grant licenses or franchises in those systems without providing any rights to you; and
- To engage, directly or indirectly, at wholesale, retail or otherwise, in (a) the production, distribution, license and sale of products and services, and (b) the use of the Marks and any and all trademarks, trade names, service marks, logos, insignia, slogans, emblems, symbols, designs and other identifying characteristics we may develop for that purpose.
Source: Item 13 — Trademarks (FDD pages 39–41)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc retains specific rights regarding the use of its trademarks. Bhc has the explicit right to develop and establish other systems utilizing the Bhc trademarks or other names and marks. Furthermore, Bhc can grant licenses or franchises within these new systems without extending any rights to existing Bhc franchisees. This means that Bhc franchisees do not have any inherent rights to these new systems.
This aspect of the franchise agreement is crucial for potential franchisees to understand. While franchisees are granted a license to use the Bhc marks, this license is non-exclusive. Bhc retains the freedom to expand its brand through different avenues, potentially creating competition or alternative business models that existing franchisees have no claim to. This is a fairly common practice in franchising, allowing franchisors to adapt and grow without being constrained by existing agreements.
For a prospective franchisee, this underscores the importance of carefully evaluating the long-term strategy of Bhc and understanding the potential for the brand to evolve in ways that may not directly benefit them. It would be prudent to inquire about Bhc's future development plans and how they might impact the existing franchise network. Understanding the franchisor's vision can help a franchisee make an informed decision about their investment and future business prospects.