Is the arbitrator allowed to declare Bft trademarks generic or invalid during arbitration?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator has the right to award or include in his or her awards any relief which he or she deems proper, including money damages, pre- and post-award interest, interim costs and attorneys' fees, specific performance, and injunctive relief, provided that the arbitrator may not declare any of the trademarks owned by Franchisor, or its parents, affiliates, and subsidiaries, generic or otherwise invalid, or award any punitive or exemplary damages against any Party to the arbitration proceeding (Franchisor and Developer hereby waiving to the fullest extent permitted by law any such right to or claim for any punitive or exemplary damages against any Party to the arbitration proceeding). Except as otherwise stated in this Agreement, the arbitrator shall have no authority to issue any relief on any basis other than an individual basis.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, the arbitrator in a dispute resolution is specifically restricted from declaring Bft's trademarks as generic or invalid. This limitation extends not only to the trademarks owned directly by Bft Franchise SPV, LLC, but also to those of its parents, affiliates, and subsidiaries. This provision is in place to protect the brand's intellectual property and ensure consistency in its usage and perception.
This restriction on the arbitrator's power is a significant point for prospective franchisees. It means that during any dispute resolution process, the validity and ownership of Bft's trademarks cannot be challenged or altered by the arbitrator. This protects Bft's brand identity and market position, which are critical assets for the entire franchise system. Franchisees benefit from this protection as it ensures the continued strength and recognition of the Bft brand.
However, franchisees should also consider the implications of this clause. While it protects the brand, it also means that franchisees cannot argue the trademarks are unenforceable or generic as part of a dispute resolution. This could be relevant if a franchisee believes Bft is not adequately protecting its trademarks, or if there are concerns about the trademarks' validity. Therefore, it is important for potential franchisees to fully understand this limitation and its potential impact on their rights during dispute resolution.