If a Carbones Pizzeria franchisee misuses the trademark, is that considered a curable default?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary |
|---|---|---|
| Franchise Agreement | ||
| a. Length of the Franchise term | Section 2 | 10 years from date of signing the Franchise Agreement |
| b. Renewal or extension of the term | Section 2 (See Note 2) | One 10 year term |
| c. Requirements for franchisee to renew or extend | Section 2 | Sign new agreement (which may contain materially different terms and conditions than your original Franchise Agreement), pay renewal fee, update your Restaurant to meet our then-current requirements for new restaurants |
| d. Termination by franchisee | None | Not applicable |
| e. Termination by franchisor without | None | Not applicable |
| cause | ||
| f. Termination by franchisor with cause | Section 15 | We may terminate only if you do one of the things described in Section 15 |
| g. "Cause" defined – curable defaults | Sections 15(e) through 15(f) | You have 30 days to cure nonpayment of fees, sanitation problems, non submission of reports and any other default not listed in Section 15 |
| h. "Cause" defined – non-curable defaults | Sections 15(a) through 15(d) | Non curable defaults include abandonment, trademark misuse and conviction of an offense directly related to the Restaurant business |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 24–26)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, trademark misuse is considered a non-curable default. This means that if a franchisee misuses the Carbones Pizzeria trademark, the franchisor has grounds to terminate the franchise agreement without providing an opportunity for the franchisee to correct the issue.
This policy differs from curable defaults, such as non-payment of fees or failure to submit required reports, where the franchisee is given a 30-day period to rectify the situation. The distinction highlights the critical importance Carbones Pizzeria places on protecting its brand and intellectual property. Trademark misuse can severely damage a brand's reputation and market position, justifying the immediate termination clause.
For a prospective Carbones Pizzeria franchisee, this underscores the need to fully understand and adhere to the franchisor's guidelines regarding trademark usage. Any deviation, whether intentional or unintentional, could lead to immediate termination of the franchise agreement. Franchisees should seek clarification from Carbones Pizzeria on any aspects of trademark usage that are unclear to avoid potential violations and ensure compliance with the franchise agreement.