Can a Bhc master franchisee claim any goodwill, reputation, or ownership due to their use of the Marks?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Master Franchisee now asserts no claim and will hereafter assert no claim to any goodwill, reputation, or ownership thereof because of Master 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, instruction sheets, forms, methods of operation and goodwill are and, as between Master Franchisee and Franchisor, remain vested solely in Franchisor, and the use thereof is only co-extensive with the term of this Agreement.
(c) Master Franchisee agrees that during the term of the Franchise, and after any assignment, expiration or termination of the Franchise, Master Franchisee will not, directly or indirectly, commit an act of infringement or contest or aid others in contesting the validity, distinctiveness, secondary meaning, ownership or enforceability of the Marks or Intellectual Property, or take any other action in derogation of the Marks or Intellectual Property, and that no monetary amount will be assigned as attributable to any goodwill associated with Master Franchisee's use of the System, the Marks or Intellectual Property.
(d) Master Franchisee hereby grants Franchisor the right at any time to use the name, image and likeness of Master Franchisee and all Principal Equity Operators for commercial purposes in connection with the marketing and promotion of the Marks, Franchisor's Intellectual Property, BHC Products, any BHC business location and the System, without any form of compensation or remuneration.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, a master franchisee cannot claim any goodwill, reputation, or ownership related to their use of Bhc's marks. The agreement explicitly states that all rights to use the marks and intellectual property within the franchised system are Bhc's exclusive property. The master franchisee acknowledges that their use of the marks is a temporary, authorized use, and that Bhc and the owner of the marks retain all ownership of the goodwill generated by the marks. This applies both during the term of the franchise agreement and after its termination.
Specifically, the master franchisee agrees not to contest the validity, distinctiveness, or enforceability of the marks, and that no monetary amount will be assigned to any goodwill associated with their use of the system, marks, or intellectual property. This ensures that Bhc maintains control over its brand and reputation, preventing franchisees from claiming ownership or rights to the brand's goodwill.
This is a standard practice in franchising, as the franchisor needs to protect its brand identity and ensure consistent quality across all franchise locations. By preventing franchisees from claiming ownership of goodwill, Bhc can maintain uniformity and protect the overall value of the brand. Additionally, Bhc has the right to use the name, image, and likeness of the master franchisee and their principal equity operators for commercial purposes in marketing and promotion without compensation.