Under what conditions are the covenants in the Bhc franchise agreement enforceable even after the agreement's expiration, termination, cancellation, or assignment?

According to Bhc's 2025 Franchise Disclosure Document, certain covenants within the franchise agreement remain enforceable even after the agreement's expiration, termination, cancellation, or assignment. Specifically, covenants that, by their terms, necessitate continued performance by either party after the agreement concludes are still binding. This ensures that obligations meant to extend beyond the active term of the franchise are upheld.

One notable example of such a covenant is the post-termination non-competition agreement. For a period of two years after the termination, cancellation, or expiration of the agreement without renewal, the franchisee and their principal equity operators are prohibited from engaging in any competing business that sells goods or offers services equivalent to Bhc products within a 25-mile radius of the former franchise location or any other authorized retail location selling Bhc products. This restriction is in place to protect Bhc's market share and brand integrity.

Additionally, franchisees are obligated to discontinue using or displaying Bhc's marks and must not operate under any name that might suggest affiliation with Bhc after the agreement ends. They must also update online listings to remove references to the Bhc franchise and refrain from using any proprietary information or trade secrets acquired during the franchise term. These obligations ensure a clean break and prevent confusion in the marketplace.

These measures are typical in franchising to protect the brand and maintain standards even after a franchise relationship concludes. Prospective Bhc franchisees should carefully review all covenants within the franchise agreement to understand which obligations extend beyond the agreement's term and the potential implications for their future business activities.