Does the Bhc Master Franchisee acquire any ownership interest in the Proprietary Information disclosed to them?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Master Franchisee acknowledges that Franchisor is the sole owner of all Proprietary Information, including the Trade Secrets; that such information is being imparted to Master Franchisee only because of Master Franchisee's special status as a Master 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 Master Franchisee except by reason of such disclosure.
Master Franchisee further acknowledges that Master Franchisee will acquire no interest in the Proprietary Information disclosed to Master Franchisee, other than the right to use it in the development and operation of the 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, the Master Franchisee does not acquire any ownership interest in the Proprietary Information disclosed to them. The franchisor retains sole ownership of all Proprietary Information, including Trade Secrets. Bhc is granting the Master Franchisee access to this information solely for the purpose of operating the Franchised Business during the term of the agreement.
This means that the Master Franchisee's rights to use the Proprietary Information are limited to the duration of the franchise agreement. Upon termination or expiration of the agreement, the Master Franchisee must cease using the Proprietary Information. This is a standard practice in franchising, as the franchisor needs to protect its intellectual property and ensure consistent brand standards across all franchise locations.
The Master Franchisee acknowledges that the Proprietary Information is not generally known and is being disclosed to them specifically because of their role as a Master Franchisee within the Bhc system. The Master Franchisee can only use the Proprietary Information to develop and operate their BHC Restaurant during the term of the Agreement. This underscores the importance of maintaining confidentiality and adhering to the terms of the franchise agreement to avoid any potential legal issues or termination of the franchise.