What is the geographic scope of the non-exclusive license granted to the Bhc franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
pecialty retail items and promotional activities) are undertaken to develop, maintain and enhance the Marks and Franchisor's business reputation.
2.2 The Franchise System.
Franchisor has developed and supervises the System and all BHC retail locations to be operated under the Marks operated in accordance with the provisions of BHC franchise agreements and Franchisor's Operations Manual, as periodically amended.
3. GRANT OF FRANCHISE
3.1 Grant of Franchise.
- (a) By their respective signatures below, Franchisor hereby grants to Franchisee, and Franchisee hereby accepts, a non-exclusive license ("Franchise") to participate in and use the System to conduct the Franchised Business at the Franchised BHC Restaurant and within Franchisee's Territory as described in Exhibit 1 attached hereto, in strict accordance with this Agreement and the Operations Manual, from the Effective Date until the end of the term hereof, and any additional term unless sooner terminated. So long as Franchisee complies with this Agreement, Franchisor will not authorize another BHC franchisee to operate, or itself operate, a BHC retail Franchised BHC Restaurant in Franchisee's Territory, subject to exceptions and reservations provided herein.
- (b) Franchisor is executing this Agreement in reliance that the Principal Equity Operators and other individuals identified in Exhibit 2 of this Agreement are the sole holders of a legal or beneficial interest in Franchisee.
- (c) Each Principal Equity Operator (and their respective spouses, if applicable), must execute the Guarantee of Franchise Agreement attached as Exhibit 3 of this Agreement.
- (d) Franchisee acknowledges that Franchisor may have granted and may in the future operate or grant other licenses and franchises for other retail and wholesale food service businesses outside the Territory. FRANCHISEE MAY NOT USE FRANCHISOR'S MARKS, OPERATIONAL TECHNIQUES, SERVICE CONCEPTS OR PROPRIETARY INFORMATION IN CONNECTION WITH ANY BUSINESSES OR SERVICES OTHER THAN THE FRANCHISED BUSINESS CONDUCTED BY FRANCHISEE AT THE FRANCHISED BHC RESTAURANT WITHOUT FRANCHISOR'S EXPRESS PRIOR WRITTEN PERMISSION, WHICH PERMISSION, IF GRANTED, WILL BRING SUCH BUSINESSES OR SERVICES WITHIN THE SCOPE OF THE FRANCHISED BUSINESS AND SUBJECT REVENUES THEREFROM TO PAYMENT OF ROYALTY AND MARKETING AND PROMOTION FEES.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the geographic scope of the non-exclusive license granted to a franchisee is primarily limited to their designated territory and the physical location of their franchised BHC restaurant. Bhc grants the franchisee a non-exclusive license to operate the franchised business at the BHC restaurant within the franchisee's territory, as detailed in Exhibit 1 of the Franchise Agreement. This means that while the franchisee has the right to operate within their specified territory, Bhc retains the right to grant other franchises outside of that territory.
Bhc ensures that as long as the franchisee complies with the agreement, it will not authorize another BHC franchisee or operate a BHC retail restaurant within the franchisee's territory. However, this exclusivity is subject to certain exceptions and reservations outlined in the agreement. The franchisee's rights are generally confined to the operation of the business at the physical restaurant location, and any expansion beyond this location requires specific approval from Bhc.
Bhc also reserves the right to market and sell BHC products through other channels of distribution, even within the franchisee's territory. This includes venues other than BHC restaurants. The franchisee is restricted from using Bhc's marks, operational techniques, service concepts, or proprietary information in connection with any businesses or services other than the franchised business conducted at the BHC restaurant, without prior written permission from Bhc. This permission, if granted, would bring such additional businesses or services within the scope of the franchise, subjecting their revenues to royalty and marketing fees.