What happens if a Bhc franchisee learns of a challenge to the use of Bhc's marks?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately when you learn about an infringement of or challenge to your use of our Marks. We will take the action we think appropriate. We will have sole discretion to take the action we deem appropriate and will have the right to control exclusively any litigation or U.S. Patent and Trademark Office proceeding arising out of any infringement, challenge or claim relating to any principal
trademark. You must sign all documents, render assistance, and do all things that our counsel deems necessary to protect our interests in any litigation or U.S. Patent and Trademark Office proceeding or otherwise to protect our interests in the principal trademarks.
While we are not required to defend you against a claim against your use of our Marks, we will reimburse you for your liability and reasonable costs in connection with defending our Marks. To receive reimbursement, you must have notified us immediately when you learned about the infringement or challenge.
You must modify or discontinue the use of a principal trademark if we modify or discontinues it. If this happens, we will reimburse you for your tangible costs of compliance (for example, changing signs). You must not directly or indirectly contest our right to our trademarks, trade secrets or business techniques that are part of our business.
Source: Item 14 — Patents, Copyrights, And Proprietary Information (FDD pages 41–42)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees must immediately notify Bhc if they become aware of any infringement or challenge to the use of Bhc's trademarks. Bhc retains the sole discretion to take any action it deems appropriate in response to such a notification. Bhc also has the exclusive right to control any litigation or U.S. Patent and Trademark Office proceeding arising from the infringement, challenge, or claim relating to any principal trademark. Franchisees are obligated to sign documents, provide assistance, and perform all actions deemed necessary by Bhc's counsel to protect Bhc's interests in any legal or administrative proceedings or to otherwise protect Bhc's interests in its principal trademarks.
While Bhc is not required to defend franchisees against claims regarding the use of Bhc's marks, Bhc will reimburse franchisees for their liability and reasonable costs incurred in defending the marks, provided that the franchisee immediately notified Bhc upon learning of the infringement or challenge. Franchisees must also modify or discontinue the use of a principal trademark if Bhc modifies or discontinues it. In such cases, Bhc will reimburse franchisees for their tangible costs of compliance, such as changing signs.
It is important to note that franchisees are prohibited from directly or indirectly contesting Bhc's rights to its trademarks, trade secrets, or business techniques that are part of its business. This clause underscores Bhc's control over its intellectual property and the franchisee's obligation to protect and uphold Bhc's brand and proprietary information. This is a fairly standard clause in franchise agreements, as franchisors need to protect their brand and trademarks.