Who retains ownership of the goodwill generated by the Marks in the Bhc franchise system?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Franchisee acknowledges and agrees (i) Franchisee's use of the Marks and Intellectual Property is a temporary authorized use under this Agreement, (ii) the Owner of the Marks retains all ownership interests in the Marks, and (iii) Franchisor and the Owner of the Marks retain all ownership of the goodwill generated by the Marks. Franchisee acknowledges that the use of the Marks outside the scope of the terms of this Agreement without Franchisor's written consent is an infringement of the Owner of the Marks' and Franchisor's exclusive right, title, and interest in and to the Marks and Intellectual Property. Franchisee agrees that as between Franchisee and Franchisor, all rights to use the Marks and Intellectual Property within the franchised System are Franchisor's exclusive property. Franchisee now asserts no claim and will hereafter assert no claim to any goodwill, reputation, or ownership thereof because of 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,
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the franchisor and the owner of the marks retain all ownership of the goodwill generated by the Marks. The franchisee's use of the Marks and Intellectual Property is a temporary authorized use under the Franchise Agreement. The franchisee acknowledges that they assert no claim to any goodwill, reputation, or ownership because of the franchisee's use.
This means that while franchisees benefit from the brand recognition and reputation of Bhc, they do not build equity in the brand itself. The goodwill associated with the Bhc brand remains the property of the franchisor and the owner of the Marks. This is a standard practice in franchising, as it ensures the consistency and uniformity of the brand across all locations.
Upon termination or expiration of the franchise agreement, the franchisee's right to use the Bhc Marks ceases, and any goodwill generated during the franchise term reverts back to the franchisor. This is a critical point for prospective franchisees to understand, as it affects the long-term value and potential resale value of their business. Franchisees cannot sell the goodwill they helped create during the term of their agreement.