What is the Master Franchisee prohibited from doing regarding Bhc's rights in connection with the Marks, both during and after the term of the Agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee is restricted from certain actions concerning Bhc's rights to its Marks, both during and after the agreement. During the franchise term, and after any assignment, expiration, or termination, the Master Franchisee cannot directly or indirectly infringe upon or contest the validity, distinctiveness, ownership, or enforceability of the Marks or Intellectual Property. They are also prohibited from assisting others in doing so or taking any action that could harm the Marks or Intellectual Property.
Furthermore, the Master Franchisee agrees that no monetary value will be attributed to any goodwill associated with their use of the System, the Marks, or Intellectual Property. This means that upon termination, the Master Franchisee cannot claim compensation for any goodwill they may have built up using Bhc's brand. The Master Franchisee acknowledges that using the Marks outside the scope of the agreement without Bhc's written consent infringes upon Bhc's exclusive rights to the Marks and Intellectual Property.
These restrictions ensure that Bhc maintains control over its brand and intellectual property, even after a Master Franchise Agreement ends. Prospective franchisees should understand that they are building goodwill for the Bhc brand, not for themselves, and they cannot take actions that undermine the brand's value or create confusion about its ownership.