What rights does Bhc retain regarding litigation related to its trademarks?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately when you learn about an infringement of or challenge to your use of our Marks. We will take the action we think appropriate. We will have sole discretion to take the action we deem appropriate and will have the right to control exclusively any litigation or U.S. Patent and Trademark Office proceeding arising out of any infringement, challenge or claim relating to any principal
trademark. You must sign all documents, render assistance, and do all things that our counsel deems necessary to protect our interests in any litigation or U.S. Patent and Trademark Office proceeding or otherwise to protect our interests in the principal trademarks.
While we are not required to defend you against a claim against your use of our Marks, we will reimburse you for your liability and reasonable costs in connection with defending our Marks. To receive reimbursement, you must have notified us immediately when you learned about the infringement or challenge.
You must modify or discontinue the use of a principal trademark if we modify or discontinues it. If this happens, we will reimburse you for your tangible costs of compliance (for example, changing signs). You must not directly or indirectly contest our right to our trademarks, trade secrets or business techniques that are part of our business.
Source: Item 14 — Patents, Copyrights, And Proprietary Information (FDD pages 41–42)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc retains significant control over litigation related to its trademarks. Bhc has the sole discretion to take any action it deems appropriate regarding infringements, challenges, or claims relating to any principal trademark. This means Bhc, not the franchisee, decides how to respond to any legal issues concerning the trademarks.
Bhc also has the exclusive right to control any litigation or U.S. Patent and Trademark Office proceeding arising out of any infringement, challenge, or claim relating to any principal trademark. This gives Bhc complete authority over the legal strategy and decisions in such cases. The franchisee is obligated to sign all documents, provide assistance, and take actions deemed necessary by Bhc's counsel to protect Bhc's interests in these matters.
While Bhc is not required to defend a franchisee against claims arising from the use of Bhc's marks, Bhc will reimburse the franchisee for their liability and reasonable costs in connection with defending Bhc's marks, provided the franchisee immediately notified Bhc about the infringement or challenge. Franchisees must also modify or discontinue the use of a principal trademark if Bhc modifies or discontinues it, in which case Bhc will reimburse the franchisee for tangible costs of compliance, such as changing signs. Franchisees are prohibited from directly or indirectly contesting Bhc's rights to its trademarks, trade secrets, or business techniques.
In practical terms, a Bhc franchisee must promptly report any potential trademark issues to Bhc and follow Bhc's instructions. While franchisees bear some initial responsibility for defense, Bhc will cover reasonable costs if the franchisee acts accordingly. This arrangement protects Bhc's brand identity and ensures consistent legal action across all franchise locations, while also providing some financial protection to franchisees who cooperate with Bhc's legal strategy.