Does the Bhc franchisee's use of the Marks and Intellectual Property represent a permanent ownership interest?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Franchisee acknowledges and agrees (i) Franchisee's use of the Marks and Intellectual Property is a temporary authorized use under this Agreement, (ii) the Owner of the Marks retains all ownership interests in the Marks, and (iii) Franchisor and the Owner of the Marks retain all ownership of the goodwill generated by the Marks. Franchisee acknowledges that the use of the Marks outside the scope of the terms of this Agreement without Franchisor's written consent is an infringement of the Owner of the Marks' and Franchisor's exclusive right, title, and interest in and to the Marks and Intellectual Property. Franchisee agrees that as between Franchisee and Franchisor, all rights to use the Marks and Intellectual Property within the franchised System are Franchisor's exclusive property. Franchisee now asserts no claim and will hereafter assert no claim to any goodwill, reputation, or ownership thereof because of Franchisee's use thereof or otherwise. It is expressly understood and agreed that ownership and title of the Trade Dress, Operations Manual and Franchisor's other manuals, bulletins,
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees do not acquire a permanent ownership interest in the Marks and Intellectual Property. The agreement specifies that the franchisee's use of the Marks and Intellectual Property is a temporary, authorized use granted during the term of the Franchise Agreement. Bhc and the owner of the Marks retain all ownership interests, including the goodwill generated by the Marks.
This means that a Bhc franchisee's right to use the brand's trademarks, service marks, logos, and other intellectual property only lasts as long as the Franchise Agreement is in effect. Upon termination or expiration of the agreement, the franchisee must cease all use of the Marks and Intellectual Property. The franchisee cannot claim any ownership or goodwill associated with their use of the Marks during the franchise term.
This arrangement is typical in franchising, where the franchisor maintains strict control over its brand and intellectual property to ensure consistency and quality across all franchise locations. Bhc franchisees benefit from using established Marks, but they must also acknowledge that these Marks remain the exclusive property of Bhc and its owner. This is further reinforced by the franchisee's agreement not to contest the validity or enforceability of the Marks, even after the franchise relationship ends.