Who benefits from the goodwill established by the Franchisee's usage of the Marks for a Big Apple Bagels franchise?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that all usage of the Marks by Franchisee and any goodwill established thereby shall inure to the exclusive benefit of Franchisor and Licensor, and Franchisee acknowledges that this Agreement does not confer any goodwill or other interests in the Marks upon Franchisee. Franchisee shall not, at any time during the term of this Agreement or after its termination or expiration, contest the validity or ownership of any of the Marks or assist any others in contesting the validity or ownership of any of the Marks. All provisions of this Agreement applicable to the Marks shall apply to any additional trademarks, service marks, logo forms and commercial symbols hereafter authorized for use by and licensed to Franchisee pursuant to this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels's 2025 Franchise Disclosure Document, the goodwill established through the franchisee's use of the Big Apple Bagels marks benefits both the franchisor and the licensor. The franchisee acknowledges that the licensor owns the marks and that the franchisor is authorized to use them in connection with its franchise program. The franchisee's right to use the marks is solely derived from the franchise agreement. Unauthorized use of the marks constitutes an infringement of the rights of the franchisor and licensor.
This means that while a franchisee's efforts may increase brand recognition and customer loyalty in their territory, the resulting goodwill accrues to the benefit of Big Apple Bagels and its licensor, not the franchisee. This is a standard practice in franchising, as it ensures the brand's value remains with the franchisor, allowing for consistent brand management and potential future expansion or sale of the franchise system.
As a Big Apple Bagels franchisee, you agree that you won't contest the validity or ownership of the marks during or after the term of the agreement. All provisions applicable to the marks also apply to any additional trademarks, service marks, logo forms, and commercial symbols authorized for use. This underscores the importance of adhering to the franchisor's standards and guidelines to maintain the integrity of the Big Apple Bagels brand, as the value of the brand ultimately benefits the franchisor and licensor.