Who has the discretion to determine if a third party's trademark is confusingly similar to Bhc's marks?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) Franchisor will indemnify Franchisee and hold Franchisee harmless from and against any and all judgments resulting from any claim, suit or demand arising from Franchisee's authorized and use of the Marks or Franchisor's Intellectual Property in accordance with the terms of this Agreement. Franchisor has the sole discretion to determine whether a similar trademark or service mark that is being used by a third party is confusingly similar to the Marks or Franchisor's Intellectual Property being used by Franchisee or constitutes a misuse of the Marks or Franchisor's Intellectual Property, and whether and what subsequent action, if any, should be undertaken with respect to such similar trademark or service mark or misuse.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc retains sole discretion in determining whether a third party's trademark or service mark is confusingly similar to Bhc's own marks or intellectual property. This determination extends to whether the third party's use constitutes a misuse of Bhc's marks or intellectual property. Bhc also decides what subsequent actions, if any, should be taken regarding the similar trademark, service mark, or misuse.
This clause is significant for franchisees because it clarifies that Bhc maintains control over its brand and intellectual property. Franchisees are obligated to report any potential infringements or misuse of Bhc's marks but cannot independently take legal action or settle claims. Bhc assumes the responsibility for defending and protecting its trademarks, which includes deciding whether to pursue legal action against potential infringers.
This arrangement benefits franchisees by relieving them of the burden and cost of trademark enforcement. However, it also means that franchisees must rely on Bhc to take appropriate action, and they have no direct control over the process. Franchisees are required to cooperate fully with Bhc in any legal matters related to trademark protection.
In the event of a claim, suit, or demand against the franchisee due to the authorized use of Bhc's marks, Bhc will indemnify the franchisee and hold them harmless from any resulting judgments. Conversely, the franchisee must indemnify Bhc against any judgments resulting from unauthorized or improper use of Bhc's marks or intellectual property.