What should a Carls franchisee do regarding filings or registrations for the Franchised Restaurant that contain any Proprietary Marks upon termination?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
- E. Franchisee immediately shall discontinue all use of the Proprietary Marks in connection with the Franchised Restaurant and of any and all items bearing the Proprietary Marks; remove the Proprietary Marks from the Franchised Restaurant and from clothing, signs, materials, motor vehicles and other items owned or used by Franchisee in the operation of the Franchised Restaurant (unless CJR directs Franchisee to temporarily refrain from doing so while CJR determines if it will exercise its option under Section 23); cancel all advertising for the Franchised Restaurant that contains the Proprietary Marks (including telephone directory listings); and take such action as may be necessary to cancel any filings or registrations for the Franchised Restaurant that contain any Proprietary Marks.
Source: Item 22 — CONTRACTS (FDD page 80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, a franchisee must take specific actions regarding the Proprietary Marks upon termination of the franchise agreement. The franchisee is required to immediately discontinue all use of the Proprietary Marks in connection with the Franchised Restaurant. This includes removing the Proprietary Marks from the restaurant itself, as well as from clothing, signs, materials, motor vehicles, and any other items used in the operation of the restaurant.
Additionally, the franchisee must cancel all advertising for the Franchised Restaurant that contains the Proprietary Marks, including telephone directory listings. Most importantly, the franchisee is obligated to take any action necessary to cancel any filings or registrations for the Franchised Restaurant that contain any Proprietary Marks. This ensures that the franchisee no longer has any association with the Carls brand after the termination of the agreement.
These requirements are typical in franchise agreements to protect the brand's trademarks and prevent any potential confusion among customers. By ensuring the removal of all Proprietary Marks and cancellation of related filings, Carls maintains control over its brand identity and prevents former franchisees from operating under the Carls name without authorization. This protects both the franchisor and the remaining franchisees in the system.