Is the arbitrator allowed to declare any Mark generic or otherwise invalid in a Bhc arbitration?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator will have the right to award or include in the award any relief that the arbitrator deems proper in the circumstances, including money damages (with interest on unpaid amounts from the date due), specific performance and injunctive relief, provided that the arbitrator will not have the right to declare any Mark generic or otherwise invalid or to award punitive damages.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the arbitrator in a dispute resolution is specifically restricted from declaring any of Bhc's marks as generic or invalid. This limitation is in place even though the arbitrator has the right to award relief deemed proper, such as money damages, specific performance, and injunctive relief.
This restriction means that a franchisee cannot argue in arbitration that Bhc's trademarks are unenforceable due to being generic or otherwise invalid. The arbitrator's role is limited to resolving disputes within the confines of the existing trademark protections. This could be a significant consideration for a franchisee if they believe the trademarks are weak or susceptible to challenge.
This clause protects Bhc's intellectual property rights by preventing challenges to their validity during arbitration. While franchisees retain the right to present their case and seek various forms of relief, they cannot use the arbitration process to undermine Bhc's trademarks. Franchisees should be aware of this limitation and seek legal counsel to understand its implications fully.