factual

What is the Bhc Master Franchisee's obligation regarding Trade Secrets after termination?

Bhc Franchise · 2025 FDD

Answer from 2025 FDD Document

le from the other provisions of this Agreement, (ii) intended to survive any judgment, and (iii) not to be deemed merged into the judgment.

14.5 Survival.

The terms of this Article 14 survive termination, expiration or cancellation of this Agreement.

15. OBLIGATIONS AND RIGHTS UPON TERMINATION OR EXPIRATION

15.1 Master Franchisee's Obligations.

  • (a) In the event of termination, cancellation or expiration of this Agreement whether by reason of Master Franchisee's breach, default, non-renewal, lapse of time or other cause, in addition to any other obligations provided for in this Agreement, Master Franchisee must forthwith discontinue the use or display of the Marks in any manner whatsoever, and Master Franchisee may not thereafter operate or do business under the Marks or any other BHC brand or any other name or in any manner that might tend to give the general public the impression that Master Franchisee is in any way associated or affiliated with Franchisor, or any of the businesses conducted by Franchisor or the Owner of the Marks, including without limitation repainting the business premises in a distinctively different color and removing or rearranging distinctive elements of the Trade Dress. Master Franchisee must contact online review sites and other online directories and websites which have made reference to Master Franchised BHC Restaurant during the 18 months prior to the date this Agreement terminates, is cancelled, or expires, and request the removal of all use of the trademarks in connection with the former BHC franchised BHC Restaurant (and the physical address of the former BHC Restaurant) and all use of former reviews from the period Master Franchisee was a BHC Master Franchisee. And, Master Franchisee also must comply with section 15.2 respecting the return to Franchisor of certain materials and must not thereafter use, in any manner, or for any purpose, directly or indirectly, any of the Proprietary Information, Trade Secrets, procedures, techniques, or materials acquired by Master Franchisee by virtue of the relationship established by this Agreement, including, without limitation, (i) any training or other materials, manuals, bulletins, instruction sheets, or supplements thereto, or (ii) any equipment, videotapes, videodiscs, forms, advertising matter, devices, insignias, slogans or designs used from time to time in connection with the Franchised Business.

  • (b) If there is a termination, cancellation or expiration as described in section 15.1(a) above, Master Franchisee must comply with section 11.2 of this Agreement respecting post-termination competition and also promptly:

  • (i) remove at Master Franchisee's expense all signs erected or used by Master Franchisee and bearing the Marks, or any word or mark indicating that Master Franchisee is associated or affiliated with Franchisor;

  • (ii) erase or obliterate from letterheads, stationery, printed matter, advertising, or other forms used by Master Franchisee the Marks and all words indicating that Master Franchisee is associated or affiliated with Franchisor;

  • (iii) permanently discontinue all advertising stating or implying Master Franchisee is associated or affiliated with Franchisor or the System (if Master Franchisee engages in any business thereafter, Master Franchisee must use trade names, service marks or trademarks that are significantly different from those under which Master Franchisee had done business and must use sign formats that are significantly different in color and type face; and take all necessary steps to ensure that Master Franchisee's present and former employees, agents, officers, shareholders and partners observe the foregoing obligations);

Source: Item 23 — Receipts (FDD pages 52–230)

What This Means (2025 FDD)

According to Bhc's 2025 Franchise Disclosure Document, the Master Franchisee has specific obligations regarding trade secrets and proprietary information, both during the term of the agreement and after termination. Bhc grants the Master Franchisee access to proprietary information and trade secrets, with the explicit understanding that this information is confidential. The Master Franchisee acknowledges that Bhc owns all proprietary information, including trade secrets, and that this information is revealed solely due to their status as a Master Franchisee.

Upon termination, cancellation, or expiration of the Master Franchise Agreement, the Master Franchisee must immediately stop using or displaying Bhc's marks and cannot operate under any name that might suggest affiliation with Bhc. More specifically, the Master Franchisee is prohibited from using any proprietary information, trade secrets, procedures, techniques, or materials acquired during the agreement. This includes training materials, manuals, bulletins, instruction sheets, equipment, videotapes, forms, advertising matter, devices, insignias, slogans, or designs associated with the franchised business.

Furthermore, for a period of two years after the termination date, the Master Franchisee is restricted from engaging in any competing business selling similar goods or services within a 25-mile radius of their former territory or any other authorized retail location selling Bhc products, without Bhc's prior written consent. Following termination or expiration, the Master Franchisee must always refrain from any use, direct or indirect, of any Proprietary Information or Trade Secrets.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.