Does the Carls Jr. franchisee own the rights to the Proprietary Marks?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that nothing in this Agreement gives it any right, title or interest in the Proprietary Marks (except the right to use the Proprietary Marks in accordance with the terms of this Agreement), that the Proprietary Marks are the sole property of CJR and CJR Affiliates, that Franchisee shall not directly or indirectly contest the validity or ownership of the Proprietary Marks or CJR's right to license the Proprietary Marks, and that any and all uses by Franchisee of the Proprietary Marks and the goodwill arising therefrom shall inure exclusively to the benefit of CJR and CJR Affiliates. Franchisee will not seek to register, reregister, assert claim to ownership of, license or allow others to use, or otherwise appropriate to itself any of the Proprietary Marks or any mark or name confusingly similar thereto, or the goodwill symbolized by any of the foregoing except to the extent this action inures to the benefit of, and has the prior written approval of, CJR. Any unauthorized use of the Proprietary Marks by Franchisee or attempt by Franchisee, directly or indirectly, to register the Proprietary Marks in any jurisdiction shall constitute a breach of this Agreement and an infringement of the rights of CJR and CJR Affiliates in and to the Proprietary Marks.
Source: Item 22 — CONTRACTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the franchisee does not own the rights to the Proprietary Marks. The Proprietary Marks, which include trade names, trademarks, service marks, logos and other identifying symbols of the Carls Jr. system, remain the sole property of CJR and its affiliates. The franchisee is only granted a limited license to use these marks in the operation of their franchised restaurant, and this use must adhere to Carls Jr.'s standards and guidelines.
This means a prospective Carls Jr. franchisee cannot claim ownership or attempt to register the Proprietary Marks. All goodwill associated with the use of these marks accrues exclusively to the benefit of CJR and its affiliates. The franchisee's right to use the Proprietary Marks is restricted to the operation of the Franchised Restaurant at the Franchised Location and as expressly provided in the franchise agreement and the OPM (Operating Procedures Manual).
Carls Jr. retains the right to modify the Proprietary Marks and advise franchisees of any changes. Unauthorized use of the Proprietary Marks by the franchisee constitutes a breach of the franchise agreement and an infringement of CJR's rights. This is a standard practice in franchising, where the franchisor maintains control over its brand and image to ensure consistency across all franchise locations.
Furthermore, the agreement does not grant the franchisee any exclusive rights to use the Proprietary Marks in any geographic area. Carls Jr. reserves all rights to use and license the System and the Proprietary Marks other than those expressly granted under the agreement. This allows Carls Jr. to operate or license others to operate Carls Jr. Restaurants at any location, with some limitations during the term of the agreement.