Does the Bhc franchisee acquire any ownership interest in the Proprietary Information disclosed to them?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Franchisee acknowledges that Franchisor is the sole owner of all Proprietary Information, including the Trade Secrets; that such information is being imparted to Franchisee only because of Franchisee's special status as a franchisee of the System; and that the Proprietary Information is not generally known to Franchisor's industry or the public at large and is not known to Franchisee except by reason of such disclosure.
Franchisee further acknowledges that Franchisee will acquire no interest in the Proprietary Information disclosed to Franchisee, other than the right to use it in the development and operation of the Franchised BHC Restaurant during the term of this Agreement.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees do not acquire any ownership interest in the proprietary information disclosed to them. Bhc retains sole ownership of all Proprietary Information, including Trade Secrets. Franchisees are granted access to this information solely because of their status as a franchisee within the Bhc system. This proprietary information is not generally known outside of Bhc's franchise network.
The franchisee's rights are limited to using the Proprietary Information for the development and operation of their franchised Bhc restaurant during the term of the Franchise Agreement. This means that while franchisees can utilize Bhc's confidential information to run their business, they cannot claim ownership or transfer the rights to others.
This is a common practice in franchising, as franchisors need to protect their intellectual property and maintain uniformity across the franchise system. Prospective Bhc franchisees should understand that their access to and use of the Proprietary Information is contingent upon maintaining their franchisee status and adhering to the terms of the Franchise Agreement. Upon termination of the agreement, the right to use this information ceases.