Who does the goodwill from the use of the Capriottis Sandwich Shop trademarks accrue to?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon execution of the Franchise Agreement, we will grant you the non-exclusive right and privilege to use the Marks in your CAPRIOTTI'S SANDWICH SHOP Restaurant. You may not use any of our Marks as part of your firm or corporate name. You may not use the Marks for the sale of unauthorized products or services or in any manner not authorized in writing by us. Any right or privilege you may have to use our Marks will terminate in full when you are no longer in good standing or upon the expiration or termination of your Franchise Agreement. The Development Rights Agreement does not grant you the right to use the Marks. These rights arise only under Franchise Agreements you sign with us. All rights in and goodwill from the use of the Marks accrue to us.
Source: Item 13 — TRADEMARKS (FDD pages 46–47)
What This Means (2025 FDD)
According to Capriottis Sandwich Shop's 2025 Franchise Disclosure Document, all rights and goodwill generated from the use of their trademarks accrue to the franchisor, not the franchisee. This means that while franchisees are granted the right to use the Capriottis Sandwich Shop trademarks to operate their business, the value and reputation associated with those trademarks ultimately benefit Capriottis Sandwich Shop itself.
This is a standard practice in franchising. The franchisor owns the brand and its associated intellectual property, and the franchisee is essentially licensing the right to use it. As customers become familiar with the Capriottis Sandwich Shop name and associate it with positive experiences, the resulting goodwill increases the overall value of the Capriottis Sandwich Shop brand.
For a prospective franchisee, this means that while their efforts contribute to building the brand's reputation within their local market, they do not own any portion of that brand equity. Upon termination or expiration of the franchise agreement, the franchisee loses the right to use the trademarks, and the goodwill remains with Capriottis Sandwich Shop. This underscores the importance of understanding that franchisees are building a business under a licensed brand, not building their own independent brand.