What actions are Atwell Suites franchisees prohibited from taking that challenge the ownership of Intellectual Property as defined in the FDD?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
form, and if such communication is in digital, electronic or other computerized form, Licensee must pay any costs to retrieve, review, use or access same). IHG's designated internal franchise committee or subcommittee, must approve any such change and must determine, in the exercise of its business judgment, that the change was adopted in good faith and is consistent with the long-term overall interests of the Brand System.
6. Proprietary Rights:
A. Ownership of the Brand System.
Licensee acknowledges and agrees: (a) not to contest, either directly or indirectly, IHG's and its Affiliates' unrestricted and exclusive ownership of and right to use the Brand System and any element(s) or component(s) thereof; (b) that IHG or any of its Affiliates has the sole and exclusive right to grant licenses to use all or any element(s) or component(s) of the Brand System; and (c) that it will not take any action in derogation of such ownership and rights of IHG and any of its Affiliates. Licensee specifically agrees and acknowledges that IHG owns or is licensed to use the name and mark "Atwell Suites™" and all other Marks, as defined in paragraph 6.B. below, and other elements associated with the Brand System or derived therefrom (including but not limited to domain names or other identifications or elements used in electronic commerce), together with the goodwill symbolized thereby, and that Licensee will not contest, directly or indirectly, the validity or ownership of the Marks or take any other action in derogation of such validity or ownership either during the term of this License or after its termination. All improvements, modifications and additions whenever made to or associated with the Brand System by the parties hereto or anyone else, and all service marks, trademarks, copyrights, and service mark, trademark, domain name or similar registrations at any time used, applied for or granted in connection with the Brand System, and all goodwill arising from Licensee's use of IHG's Marks and other intellectual property, including (without limitation) local goodwill, shall inure to the benefit of and become the property of IHG. Upon expiration or termination of this License, no monetary amount shall be assigned as attributable to any goodwill associated with Licensee's use of the Brand System or any element(s) or component(s) of the Brand System including any trademarks or service marks licensed hereunder.
B. Trademark Disputes.
The "Marks" means the name and mark "Atwell Suites™", IHG One Rewards and IHG Concerto and their distinguishing characteristics and the other service marks, trademarks, trade names, slogans, commercial symbols, logos, trade dress, copyrighted material and intellectual property associated with the Brand System, including, without limitation, those which IHG may designate in the future for use and those which IHG does not designate as withdrawn from use. Licensee shall notify IHG immediately of (i) an infringement, or a challenge to Licensee's use of any of the Marks; (ii) any objections, demands, controversies, allegations or actions asserted or taken by third parties involving any of the Marks or any part of the Brand System of which Licensee becomes aware; and, (iii) any potentially infringing or unauthorized uses of any of the Marks or any part of the Brand System of which Licensee becomes aware.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 Atwell Suites FDD, franchisees are prohibited from contesting the brand system's ownership. Specifically, franchisees cannot directly or indirectly challenge IHG's exclusive ownership and rights to use the Brand System or any of its components. IHG, or its affiliates, maintains the sole right to grant licenses for any element of the Brand System. Franchisees are prohibited from any action that undermines IHG's ownership and rights. This includes contesting the validity or ownership of the "Atwell Suites™" name and mark, other marks, or elements associated with the Brand System, both during and after the license term. All improvements, modifications, and additions to the Brand System, including intellectual property, become the property of IHG. Upon the license's expiration or termination, no monetary value will be assigned to the goodwill associated with the franchisee's use of the Brand System. Franchisees must immediately notify IHG of any infringements or challenges to the use of the Marks. IHG has the exclusive right to handle disputes with third parties regarding the Marks or Brand System. Franchisees must cooperate fully with IHG in such matters, and all recoveries from these disputes belong to IHG. Franchisees are prohibited from initiating any legal actions against alleged infringers or imitators to enforce or protect the Marks or Brand System.
This section of the FDD underscores the importance of protecting the Atwell Suites brand's intellectual property. By preventing franchisees from contesting ownership or initiating legal action, Atwell Suites aims to maintain consistent brand standards and protect its trademarks. This is a common practice in franchising, as franchisors need to ensure that their brand is not diluted or misused by individual franchisees. The franchisee's role is to report any potential infringements to the franchisor, who then takes the lead in protecting the brand's intellectual property.
For a prospective Atwell Suites franchisee, this means understanding that they are licensing the use of the brand's intellectual property but will not own any part of it. It is crucial to adhere to the brand standards and report any potential infringements to IHG. Failure to comply with these requirements could lead to legal issues or termination of the franchise agreement. This also highlights the importance of due diligence in understanding the terms of the franchise agreement and the franchisor's rights to protect its intellectual property.