2015: Which subsidiaries are allowed to use Berkshire's name?

ANDREW ROSS SORKIN: This question comes from a local shareholder, Max Rudolph, who writes in:

“Recently, several subsidiaries were renamed to include Berkshire or BH in their name, which Mr. Buffett has avoided doing previously, at least due in part, I imagine, to increased reputational risk should something go wrong.

“Can you discuss how you decide which subs are allowed to rebrand, and discuss those risks, given that Clayton, NetJets, and others, have received negative publicity this year?”

And attached to that question, Steve Rider (PH) of Chicago asks, “Will Fruit of the Loom become Berkshire Undergarments?” (Laughter)

WARREN BUFFETT: Well, if it does, we won’t pay him a royalty for the idea. (Laughter)

The — we did create a Berkshire Hathaway HomeService operation, which is a franchise operation.

We bought two-thirds of the Prudential franchise operation a couple of years ago, and we have a contract where we can buy the — where we will — buy the remaining third in another couple of years.

And so we were going to lose the rights to Prudential over time. And Greg Abel asked me about using Berkshire Hathaway, and I told him that they could use it, but that if I started hearing of any abuses of it or anything of the sort, we would yank it, and that maybe that would be a useful tool in making sure that people behaved like we wanted them to. And so far, that’s worked out fine.

We’ve had no idea that we wanted to take Berkshire Hathaway into becoming a household name and that that would create extra value, but we were going to rename a large franchising operation.

And, like I say, as long as the name does not get abused, that will be fine. And the Van Tuyl Auto — we’re calling it the Berkshire Hathaway Automotive Group.

Certain of the dealers will have the right to use that as a tag line and others won’t. And, again, if there’s problems connected with it, we’ll change it.

But in a sense, that isn’t bad. If there are going to be problems, I’d just as soon hear about them. If I hear about them because the name is “Berkshire Hathaway,” that may mean that I get on top of them faster than I would otherwise.

We have no — we have — a good many of our companies, at the bottom of their letterhead or something of the sort, they say a “Berkshire Hathaway Company,” and that’s fine.

But we have no — we do not anticipate that we’re going to turn it into some huge asset by branding a bunch of products that way.

Charlie?

CHARLIE MUNGER: We’d be crazy to try and sell Berkshire Hathaway peanut brittle instead of See’s. Those old brand names are worth a lot of money.