What is the meaning of 'Marks' in the All States M.E.D. franchise agreement?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 13: TRADEMARKS]
The franchise agreement licenses to you the right to use the following principal trademarks ("Marks") registered or applied for with the U.S. Patent and Trademark Office ("USPTO"):
| Description of Mark | Serial/Registration Number | Principal or Supplemental Register of the USPTO | Registration Date |
|---|---|---|---|
| All States M.E.D. | 97936826 | Principal | Not Registered; Pending; Applied for May 15, 2023 |
We do not have a federal registration for our principal trademark. Therefore, our trademark does not have many legal benefits and rights as a federally registered trademark. If our right to use the trademark is challenged, you may have to change to an alternative trademark, which may increase your expenses.
You do not receive any rights to the Marks other than the right to use them in the operation of your Franchised Business. You must follow our rules when you use the Marks. You must use the Marks as the sole trade identification of the franchised business. You cannot use any Mark or portion of any Mark as part of any business entity name. You may not use any Mark in connection with the sale of any unauthorized services or products, or in any other manner that we do not authorize in writing. You must obtain a fictitious or assumed name registration if required by your state or local law. Any unauthorized use of the Marks by you is a breach of the Franchise Agreement and an infringement of our rights in the Marks. You must not contest the validity or ownership of the Marks, including any Marks that we license to you after you sign the Franchise Agreement. You must not assist any other person in contesting the validity or ownership of the Marks.
If we require, you must modify or discontinue the use of any Mark and use other trademarks or service marks we designate. We do not have to reimburse you for modifying or discontinuing the use of a Mark or for substituting another trademark or service mark for a discontinued Mark. If we adopt and use new or modified Marks, you must add or replace equipment, supplies and fixtures, and you must make other modifications we designate as necessary to adapt your franchised business for the new or modified Marks. We do not reimburse you for any loss of goodwill associated with a modified or discontinued Mark.
You must notify us if you apply for your own trademark or service mark registrations. You must not register or seek to register as a trademark or service mark, either with the USPTO or any state or foreign country, any of the Marks or a trademark or service mark that is confusingly similar to any of our Marks.
Office Action: On February 14, 2024, the USPTO issued a Nonfinal Office Action on our pending application for the Mark "All States M.E.D." (Serial No. 97936826) in which the USPTO questioned our right to register the Mark based upon (1) the identification of the services provided, (2) multiple class application requirements, and (3) an owner name change that was not acceptable. We have not yet replied to the Office Action. If we are not able to overcome the Office Action, then we will not be able to obtain a federal trademark registration for the mark in the table above.
Source: Item 13 — TRADEMARKS (FDD pages 29–30)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the term "Marks" refers to the principal trademarks that All States M.E.D. licenses to its franchisees. These trademarks are registered or have applications pending with the U.S. Patent and Trademark Office (USPTO). The franchise agreement grants franchisees the right to use these Marks in the operation of their franchised business. The primary trademark for All States M.E.D. is "All States M.E.D.," with a serial number of 97936826, and its registration status is currently pending as of the FDD date. All States M.E.D. does not have a federal registration for its principal trademark. Therefore, the trademark does not have as many legal benefits and rights as a federally registered trademark. If the right to use the trademark is challenged, the franchisee may have to change to an alternative trademark, which may increase expenses.
All States M.E.D. franchisees are required to adhere to specific rules when using the Marks and must use them as the sole trade identification for their franchised business. Franchisees cannot incorporate any Mark or portion thereof into their business entity name and are prohibited from using the Marks in connection with unauthorized services or products without written authorization from All States M.E.D.. Any unauthorized use of the Marks constitutes a breach of the Franchise Agreement and an infringement of All States M.E.D.'s rights. Franchisees are also prohibited from contesting the validity or ownership of the Marks.
All States M.E.D. retains significant control over the Marks. The company can require franchisees to modify or discontinue the use of any Mark and adopt new or modified Marks. Franchisees are responsible for any costs associated with adapting their business to these changes, including equipment, supplies, and fixtures. All States M.E.D. is not responsible for reimbursing franchisees for these modifications or any loss of goodwill associated with a discontinued Mark. Franchisees must also notify All States M.E.D. if they apply for their own trademark or service mark registrations and cannot register any marks confusingly similar to All States M.E.D.'s Marks.
Prospective All States M.E.D. franchisees should be aware that the franchisor's trademark application faced a Nonfinal Office Action from the USPTO on February 14, 2024, questioning the right to register the Mark based upon the identification of the services provided, multiple class application requirements, and an owner name change that was not acceptable. If All States M.E.D. cannot overcome this Office Action, they will not be able to obtain a federal trademark registration for the mark. This could impact the strength and protection of the brand's trademarks, potentially affecting the franchisee's business. Franchisees should discuss the status of the trademark registration and potential implications with All States M.E.D. before signing the Franchise Agreement.