What actions are Bhc franchisees prohibited from taking regarding the validity of the Marks after the franchise term?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
instruction sheets, forms, methods of operation and goodwill are and, as between Franchisee and Franchisor, remain vested solely in Franchisor, and the use thereof is only co-extensive with the term of this Agreement.
- (c) Franchisee agrees that during the term of the Franchise, and after any assignment, expiration or termination of the Franchise, Franchisee will not, directly or indirectly, commit an act of infringement or contest or aid others in contesting the validity, distinctiveness, secondary meaning, ownership or enforceability of the Marks or Intellectual Property, or take any other action in derogation of the Marks or Intellectual Property, and that no monetary amount will be assigned as attributable to any goodwill associated with Franchisee's use of the System, the Marks or Intellectual Property.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees are prohibited from contesting the validity of Bhc's trademarks and intellectual property, even after the franchise agreement has expired or been terminated. Specifically, franchisees cannot directly or indirectly commit any act of infringement or assist others in challenging the validity, distinctiveness, secondary meaning, ownership, or enforceability of Bhc's Marks or Intellectual Property. They are also barred from taking any action that could harm or weaken these Marks or Intellectual Property.
This restriction means that a former Bhc franchisee cannot initiate or support any legal or other challenges against Bhc's trademarks. This includes actions that dispute Bhc's ownership or right to use its brand names, logos, and other intellectual property. The franchisee also agrees that no monetary amount will be assigned as attributable to any goodwill associated with Franchisee's use of the System, the Marks or Intellectual Property.
This provision is designed to protect Bhc's brand and intellectual property rights. By agreeing to this clause, franchisees acknowledge the value and importance of Bhc's trademarks and commit to not undermining them, even after they are no longer part of the Bhc system. This is a standard practice in franchising, as franchisors need to safeguard their brand identity and prevent former franchisees from taking actions that could devalue the brand.