Upon expiration or termination of the Baya Bar franchise agreement, will the franchisee be compensated for any goodwill associated with their use of the Intellectual Property?

According to Baya Bar's 2024 Franchise Disclosure Document, the franchisee will not be compensated for any goodwill associated with their use of the Intellectual Property upon termination or expiration of the franchise agreement. The FDD states that as between the franchisor and franchisee, the franchisor owns all rights, title, and interest in the Intellectual Property, including the goodwill associated with it.

Specifically, the franchisee acknowledges that Baya Bar owns the rights to the Marks and that the franchisee cannot take any action that would prejudice or interfere with the validity of Baya Bar's rights with respect to the Intellectual Property. This reinforces that any goodwill generated through the use of Baya Bar's Intellectual Property benefits the franchisor, not the franchisee.

This is a fairly standard practice in franchising. Typically, the goodwill developed through the use of a franchisor's trademarks and brand recognition belongs to the franchisor. This is because the franchisor has invested in developing the brand and its associated reputation. Therefore, upon termination or expiration of the franchise agreement, the franchisee does not have a right to compensation for any goodwill they may have helped create during the term of their agreement.