Can a monetary amount be assigned to goodwill associated with the Bhc master franchisee's use of the System, Marks, or Intellectual Property?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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, a monetary amount cannot be assigned to goodwill associated with the Master Franchisee's use of the System, Marks, or Intellectual Property. The agreement explicitly states that no monetary value will be attributed to any goodwill developed through the Master Franchisee's operation within the Bhc system. This applies during the term of the franchise agreement and after any assignment, expiration, or termination.
This provision protects Bhc's ownership and control over its brand and intellectual property. It ensures that the goodwill generated through the use of the Bhc system and marks remains the exclusive property of the franchisor. This is a common practice in franchising, as the franchisor invests significant resources in developing and maintaining the brand's reputation and value.
For a prospective Bhc master franchisee, this means that upon termination or expiration of the franchise agreement, they cannot claim any financial stake in the goodwill that has been built up during their operation. The franchisee is essentially building equity in the brand for the franchisor, not for themselves. This is an important consideration for potential franchisees, as it affects the long-term value and potential resale value of their business.