What happens if a franchisee creates intellectual property related to the Bhc system?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
All ideas, concepts, techniques, or materials concerning a BHC Restaurant, whether protectable intellectual property and whether created by or for you or your owners or employees, must be promptly disclosed to us and will be deemed to be our sole and exclusive property, part of the system, and works made-for-hire for us. To the extent any item does not qualify as a "work made-for-hire" for us, you assign ownership of that item, and all related rights to that item, without compensation, to us and must take whatever action (including signing assignment or other documents) we request to show our ownership or to help us obtain intellectual property rights in the item.
Source: Item 14 — Patents, Copyrights, And Proprietary Information (FDD pages 41–42)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, any intellectual property created by a franchisee or their employees related to a Bhc restaurant is automatically considered the sole and exclusive property of Bhc. This includes ideas, concepts, techniques, or materials concerning a Bhc restaurant, regardless of whether they are protectable as intellectual property.
This means that if a franchisee develops a new recipe, marketing strategy, or operational improvement, they must promptly disclose it to Bhc. Bhc will then own the rights to that creation. The FDD specifies that these creations are considered "works made-for-hire" for Bhc. If, for any reason, a creation does not legally qualify as a work-made-for-hire, the franchisee must assign ownership and all related rights to Bhc without receiving any compensation. Franchisees are also obligated to sign any documents necessary to demonstrate Bhc's ownership or to help Bhc secure intellectual property rights.
This policy is fairly common in franchising, as franchisors need to maintain consistent brand standards and protect their intellectual property. However, it is important for prospective Bhc franchisees to understand that they will not own any intellectual property they develop related to the Bhc system, even if they come up with innovative ideas that benefit the business. Franchisees should consider this when evaluating the overall value and potential rewards of investing in a Bhc franchise.