What is the definition of 'Proprietary Information' in the context of post-termination obligations for a Bhc franchisee?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
enses and compensation payable to the arbitrator), whether incurred prior to or in preparation for or in contemplation of the filing of the action or thereafter. The prevailing party will be determined by the arbitrator or court. This section 14.4 is (i) intended to be expressly severable from the other provisions of this Agreement, (ii) intended to survive any judgment, and (iii) not to be deemed merged into the judgment.
14.5 Survival.
The terms of this Article 14 survive termination, expiration or cancellation of this Agreement.
15. OBLIGATIONS AND RIGHTS UPON TERMINATION OR EXPIRATION
15.1 Franchisee's Obligations.
(a) In the event of termination, cancellation or expiration of this Agreement whether by reason of Franchisee's breach, default, non-renewal, lapse of time or other cause, in addition to any other
obligations provided for in this Agreement, Franchisee must forthwith discontinue the use or display of the Marks in any manner whatsoever, and 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 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. Franchisee must contact online review sites and other online directories and websites which have made reference to Franchisee's 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 Franchised BHC Restaurant) and all use of former reviews from the period Franchisee was a BHC franchisee. And, 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 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, Franchisee must comply with section 11.2 of this Agreement respecting post-termination competition and also promptly:
- (i) remove at Franchisee's expense all signs erected or used by Franchisee and bearing the Marks, or any word or mark indicating that Franchisee is associated or affiliated with Franchisor;
- (ii) erase or obliterate from letterheads, stationery, printed matter, advertising, or other forms used by Franchisee the Marks and all words indicating that Franchisee is associated or affiliated with Franchisor;
- (iii) permanently discontinue all advertising stating or implying Franchisee is associated or affiliated with Franchisor or the System (if Franchisee engages in any business thereafter, Franchisee must use trade names, service marks or trademarks that are significantly different from those under which 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 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 Franchised 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.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, after the termination, cancellation, or expiration of the Franchise Agreement, a franchisee is restricted from using any Proprietary Information or Trade Secrets. Bhc grants franchisees access to Proprietary Information and other confidential data, including the contents of the Operations Manual, considering them Trade Secrets. This information is revealed in confidence, and the franchisee must respect these confidences during and after the term of the agreement. Bhc retains all rights to the Marks, Proprietary Information, methods of operation, and other proprietary information, except as expressly granted to the franchisee in the agreement or the Operations Manual.
Bhc discloses Trade Secrets to franchisees as needed for operating the Franchised Business, providing the Operations Manual and other written materials, training, and assistance. The franchisee acknowledges that Bhc owns all Proprietary Information, including Trade Secrets, and that this information is disclosed solely due to their status as a franchisee. The Proprietary Information is not generally known outside of Bhc's network and is not known to the franchisee except through this disclosure.
The franchisee gains no ownership interest in the Proprietary Information, only the right to use it for the Franchised BHC Restaurant during the agreement term. The franchisee must not act in any way that infringes upon Bhc's rights to the Marks, both during and after the agreement. They are only allowed to use these for the purposes and in the manner licensed under the agreement. Franchisees and their staff must not impair the goodwill associated with the Marks. This obligation extends to refraining from using training materials, manuals, equipment, videotapes, forms, advertising matter, and designs connected with the Franchised Business after termination.