What are the B Bops franchisee's obligations regarding protecting the company's trademarks and trade secrets?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
F LICENSED MARKS. Franchisee acknowledges and agrees that Franchisee has a duty and that it is in Franchisee's best interest to maintain and enhance the goodwill inherent in the Licensed Marks. Franchisee accordingly agrees that its use of the Licensed Marks shall comply with the policies set forth in the Operations Manual and be limited solely to display in connection with operation of the Franchise on the Franchise Premises. Franchisee agrees not to use, display or imitate the Licensed Marks in connection with any goods or services not authorized for the Licensed System, except with the prior written consent of Company. Franchisee further agrees not to use the words "B-Bop's" as a part of the name of any partnership, corporation or limited liability company through which the Franchise is to be owned or operated. Franchisee shall use no trademark, trade name or service mark in connection with the Franchise other than the Licensed Marks, unless such use is first approved in writing by Company. Franchisee shall, when using the Licensed Marks, comply with all laws pertaining to trade names, trademarks and service marks, including marking all documents and materials showing registration to Company. Company may from time to time add to the Licensed Marks by notifying Franchisee of such additions in writing, and said additions shall, for purposes of this Agreement, be classified as Licensed Marks. Company shall additionally have the right, in its sole discretion, to require Franchisee to discontinue or modify use of any of the Licensed Marks within thirty (30) days of receipt of written notice from Company.
Franchisee agrees to immediately notify Company in writing of the following: (a) any challenge to Franchisee's use of the Licensed Marks; (b) any claim by a third party to rights in any of the Licensed Marks (or confusingly similar marks) that comes to the attention of Franchisee; or (c) any apparent infringement of the Licensed Marks that comes to the attention of Franchisee. Company shall have complete discretion in taking such action as it may deem appropriate upon notification of any such challenge, claim or infringement, and shall have exclusive control over any litigation or other proceeding instituted with respect to the Licensed Marks. Franchisee agrees to cooperate with Company in investigating, prosecuting or defending any action involving any of the Licensed Marks or other trade secrets of Company.
- INSURANCE OBLIGATIONS. Franchisee shall procure and maintain at Franchisee's own expense during the Term of this Agreement insurance coverage for the Franchise as specified by Company from time to time in the Operations Manual. Each policy of insurance shall be issued by an insurance carrier acceptable to Company that is legally authorized to do business in the state in which the Franchise Premises is located and shall name Company and B-Bop's, Inc. as additional insureds. All of such policies shall provide for a minimum of thirty (30) days written notice to Company prior to cancellation, termination, nonrenewal or change of such insurance. Company shall be entitled on an annual basis to impose reasonable increases in the minimum
liability coverage requirements and to require at any time on reasonable prior notice to Franchisee different or additional types of coverage to reflect inflation, changes in standards of liability or higher damage awards in liability litigation or other relevant factors.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, franchisees have several obligations regarding the protection of the company's licensed marks and trade secrets. Franchisees must acknowledge their duty to maintain and enhance the goodwill associated with B Bops's licensed marks. Their use of these marks must comply with the policies in the operations manual and be limited to the operation of the franchise at the designated premises. Franchisees cannot use the B Bops's marks for unauthorized goods or services without prior written consent, nor can they incorporate "B-Bop's" into the name of their business entity. All use of licensed marks must comply with trade name, trademark, and service mark laws, including proper registration markings. B Bops retains the right to add to or modify the licensed marks, requiring franchisees to adapt accordingly.
Franchisees are required to inform B Bops immediately of any challenges to their use of the licensed marks, any third-party claims to rights in similar marks, or any apparent infringement of the licensed marks. B Bops has complete discretion over any legal action regarding these issues, and franchisees must cooperate with the company in investigating, prosecuting, or defending any related actions or trade secrets. Franchisees also acknowledge that confidential information is disclosed to them solely under the condition that they will not use it in any other business, comply with non-compete covenants, maintain confidentiality, and prevent unauthorized use or disclosure of such information.
These stipulations are typical in franchising, as franchisors like B Bops need to protect their brand identity and proprietary information. The obligations ensure that the franchisee operates within the bounds of the franchise agreement and safeguards the brand's reputation. The non-compete and confidentiality clauses are particularly important to prevent franchisees from using B Bops's trade secrets to start a competing business, either during the franchise term or after its termination. Prospective franchisees should carefully review these obligations to understand the extent of their responsibilities in protecting B Bops's intellectual property.