Who owns the goodwill associated with the Marks used by a Bft franchisee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
4.1 Ownership of Marks. Franchisee acknowledges the validity of the Marks and agrees and recognizes that the Marks are the sole and exclusive property of Franchisor and/or its affiliates. Franchisee further acknowledges that its right to use the Marks and System is derived solely from this Agreement and is limited to the operation of the Studio pursuant to and in compliance with this Agreement. Any unauthorized use of the Marks by Franchisee shall be a breach of this Agreement and an infringement of the rights of Franchisor and its affiliates. Franchisee's use of the Marks inures to the benefit of Franchisor, which owns all goodwill now and hereafter associated with the Marks. Franchisee agrees not to contest ownership or registration of the Marks. Franchisor agrees to indemnify Franchisee from any claims, costs or fees associated with Franchisee's authorized use of the Marks in accordance with this Agreement, subject to the requirement that Franchisor be immediately notified of any third-party challenge to Franchisee's authorized use of any Mark under this Agreement, and Franchisor has the right to control any related dispute or proceeding.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft owns the goodwill associated with the Marks used by its franchisees. The FDD specifies that the franchisee acknowledges the validity of the Marks and recognizes that they are the sole and exclusive property of Bft and/or its affiliates. The franchisee's right to use the Marks and System is derived solely from the Franchise Agreement and is limited to the operation of the Studio in compliance with the agreement. Any unauthorized use of the Marks by the franchisee constitutes a breach of the agreement and an infringement of Bft's rights.
This means that while a Bft franchisee operates their studio, any positive reputation or customer loyalty (goodwill) generated through the use of Bft's trademarks benefits Bft. The franchisee cannot claim ownership of the brand's reputation or value built through the use of Bft's Marks. This is a standard practice in franchising, as it ensures the franchisor maintains control over its brand and protects its intellectual property.
Upon termination or expiration of the Franchise Agreement, the franchisee must cease using the Marks and any other intellectual property of Bft. This further reinforces that all rights and goodwill associated with the Marks revert to Bft. The franchisee is also obligated to terminate all advertising and promotional efforts that would indicate they are an authorized Bft franchisee and cancel any assumed name registrations containing any Mark. This obligation highlights the importance of Bft's ownership of the Marks and the associated goodwill, preventing franchisees from leveraging the brand's reputation after the agreement ends.