Does the Bhc agreement specify whether the Master Franchisee's post-termination obligations extend to affiliates of the Franchisor?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) In the event of termination, cancellation or expiration of this Agreement whether by reason of Master Franchisee's breach, default, non-renewal, lapse of time or other cause, in addition to any other obligations provided for in this Agreement, Master Franchisee must forthwith discontinue the use or display of the Marks in any manner whatsoever, and Master Franchisee may not thereafter operate or do business under the Marks or any other BHC brand or any other name or in any manner that might tend to give the general public the impression that Master Franchisee is in any way associated or affiliated with Franchisor, or any of the businesses conducted by Franchisor or the Owner of the Marks, including without limitation repainting the business premises in a distinctively different color and removing or rearranging distinctive elements of the Trade Dress. Master Franchisee must contact online review sites and other online directories and websites which have made reference to Master Franchised BHC Restaurant during the 18 months prior to the date this Agreement terminates, is cancelled, or expires, and request the removal of all use of the trademarks in connection with the former BHC franchised BHC Restaurant (and the physical address of the former BHC Restaurant) and all use of former reviews from the period Master Franchisee was a BHC Master Franchisee. And, Master Franchisee also must comply with section 15.2 respecting the return to Franchisor of certain materials and must not thereafter use, in any manner, or for any purpose, directly or indirectly, any of the Proprietary Information, Trade Secrets, procedures, techniques, or materials acquired by Master Franchisee by virtue of the relationship established by this Agreement, including, without limitation, (i) any training or other materials, manuals, bulletins, instruction sheets, or supplements thereto, or (ii) any equipment, videotapes, videodiscs, forms, advertising matter, devices, insignias, slogans or designs used from time to time in connection with the Franchised Business.
(b) If there is a termination, cancellation or expiration as described in section 15.1(a) above, Master Franchisee must comply with section 11.2 of this Agreement respecting post-termination competition and also promptly:
(i) remove at Master Franchisee's expense all signs erected or used by Master Franchisee and bearing the Marks, or any word or mark indicating that Master Franchisee is associated or affiliated with Franchisor;
(ii) erase or obliterate from letterheads, stationery, printed matter, advertising, or other forms used by Master Franchisee the Marks and all words indicating that Master Franchisee is associated or affiliated with Franchisor;
(iii) permanently discontinue all advertising stating or implying Master Franchisee is associated or affiliated with Franchisor or the System (if Master Franchisee engages in any business thereafter, Master Franchisee must use trade names, service marks or trademarks that are significantly different from those under which Master Franchisee had done business and must use sign formats that are significantly different in color and type face; and take all necessary steps to ensure that Master Franchisee's present and former employees, agents, officers, shareholders and partners observe the foregoing obligations); and
(iv) assign all interest and right to use all telephone numbers and all telephone and social media listings applicable to the BHC Restaurant in use at the time of such termination to Franchisor and take all actions necessary to change all such telephone numbers immediately and change all such telephone and social media listings as soon as possible.
(v) pay to the Franchisor all Royalties, other fees, and any and all amounts or accounts payable then owed the Franchisor or its affiliates pursuant to this Agreement, or pursuant to any other agreement, whether written or oral, including subleases and lease assignments, between the parties.
(c) If Master Franchisee fails or omits to make or cause to be made any removal or change described in section 15.1(b)(i) – (v) above, then Franchisor will have the right within 15 days after written notice to enter Master Franchised BHC Restaurant or other premises from which the Franchised Business is being conducted without being deemed guilty of trespass or any other tort, and make or cause to be made such removal and changes at Master Franchisee's expense, which expenses Master Franchisee agrees to pay to Franchisor promptly upon demand.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, in the event of termination of the Master Franchise Agreement, the Master Franchisee has specific obligations to discontinue use of Bhc's marks and avoid any impression of affiliation with Bhc or its related businesses. These obligations include repainting premises, removing trademarks from online platforms, and refraining from using proprietary information.
Specifically, the Master Franchisee must contact online review sites and directories to remove references to the former Bhc restaurant and its trademarks. They are also prohibited from using any proprietary information, trade secrets, or materials acquired during the franchise relationship. This extends to training materials, manuals, equipment, and advertising materials.
Additionally, the Master Franchisee is required to comply with post-termination competition restrictions as outlined in section 11.2 of the agreement. They must also remove all signs bearing Bhc's marks, erase trademarks from their materials, and discontinue advertising that implies association with Bhc. If the Master Franchisee continues in a similar business, they must use significantly different trade names and sign formats. The agreement also requires the Master Franchisee to assign all telephone numbers and social media listings to Bhc.
If the Master Franchisee fails to fulfill these obligations, Bhc has the right to enter the premises and make the necessary changes at the Master Franchisee's expense. The Master Franchisee is responsible for paying all royalties, fees, and amounts owed to Bhc or its affiliates, as per the agreement or any other agreements between the parties.