Does the Master Franchise Agreement for Bhc grant franchisees exclusive rights to use the trademarks?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
The MFA will grant you the non-exclusive rights to use the Trademarks in connection with your Master Franchise Business. BHC Korea has registered the following Trademarks, along with all required affidavits, on the Principal Register of the United States Patent and Trademark Office (USPTO) and/or the World International Property Organization:
You may not use the Marks as a part of your corporate or other legal name, and you must comply with our instructions in filing and maintaining trade name or fictitious name registrations. You must sign any documents we require to protect the Marks or to maintain their continued validity and enforceability. In addition, you may not directly or indirectly contest the validity of our ownership of or our rights in and to the Marks.
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, the Master Franchise Agreement (MFA) does not grant franchisees exclusive rights to use the trademarks. Instead, the MFA grants franchisees a non-exclusive right to use the trademarks in connection with their Master Franchise Business. This means that Bhc retains the right to grant other licenses for the use of the marks to other franchisees.
Bhc also retains the right to develop and establish other systems using the trademarks or other names and marks, and to grant licenses or franchises in those systems without providing any rights to the existing franchisee. Furthermore, Bhc can engage directly or indirectly in the production, distribution, license, and sale of products and services, as well as the use of the trademarks and any other identifying characteristics they may develop.
This non-exclusive arrangement is a standard practice in franchising, allowing Bhc to expand its brand reach and explore different business avenues. However, for the franchisee, it means that they will not have a protected territory regarding the use of the Bhc trademarks, and Bhc can license the trademarks to others, even competitors, without restriction. This could impact the franchisee's market share and revenue potential.
Additionally, the franchisee cannot use the trademarks as part of their corporate or legal name and must adhere to Bhc's instructions for trade name or fictitious name registrations. The franchisee is also obligated to sign any documents required by Bhc to protect the trademarks and maintain their validity. They cannot contest Bhc's ownership or rights to the trademarks.