Who has the sole discretion to take action regarding litigation arising out of any infringement of Bhc's trademark?
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 sole discretion regarding actions taken in response to trademark infringements. Specifically, Bhc has the right to control any litigation or U.S. Patent and Trademark Office proceeding arising from infringement, challenges, or claims related to its principal trademarks. This means that Bhc, not the franchisee, decides how to respond to any infringement of its trademarks.
This provision is significant for prospective franchisees because it clarifies that Bhc maintains control over its brand's legal defense. While franchisees are obligated to notify Bhc immediately upon learning of any infringement or challenge to the use of Bhc's marks and must assist in protecting Bhc's interests, the ultimate decision-making authority rests with Bhc. Franchisees must sign documents and provide assistance as deemed necessary by Bhc's counsel.
Bhc also states that while they are not required to defend franchisees against claims arising from the use of their marks, they will reimburse the franchisee for liability and reasonable costs associated with defending the marks, provided that Bhc was immediately notified of the infringement or challenge. Franchisees are also obligated to 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 cannot contest Bhc's rights to its trademarks, trade secrets, or business techniques.
This arrangement is fairly typical in franchising, as franchisors need to protect their brand's intellectual property consistently across all locations. By retaining control over trademark litigation, Bhc can ensure a unified and strategic approach to protecting its brand identity and reputation. Franchisees benefit from this arrangement because they are not solely responsible for the potentially high costs and complexities of trademark litigation.