Can the Bhc Master Franchisee contest the validity of the Marks during or after the franchise term?

According to Bhc's 2025 Franchise Disclosure Document, a Master Franchisee is prohibited from contesting the validity of Bhc's trademarks and intellectual property. Specifically, the Master Franchisee agrees that during the franchise term, and even after assignment, expiration, or termination of the franchise agreement, they will not directly or indirectly commit any act of infringement. They also cannot contest or assist others in contesting the validity, distinctiveness, secondary meaning, ownership, or enforceability of the Marks or Intellectual Property.

This clause ensures that the Master Franchisee cannot take any action that would undermine Bhc's brand or intellectual property rights. Furthermore, the agreement states that no monetary amount will be assigned as attributable to any goodwill associated with the Master Franchisee's use of the System, the Marks, or Intellectual Property. This reinforces that all goodwill generated through the use of Bhc's trademarks belongs solely to Bhc.

This provision is typical in franchising to protect the franchisor's brand and intellectual property. It prevents franchisees from challenging the franchisor's rights to their trademarks, trade secrets, and other proprietary information, which are essential for maintaining brand consistency and protecting the franchise system's value. By agreeing to this clause, the Master Franchisee acknowledges Bhc's exclusive ownership of the Marks and Intellectual Property and commits to upholding their validity and enforceability.