What are the Carls Jr. franchisee's obligations regarding the use of trademarks in Item 9, and how do these obligations relate to the franchisor's rights to the trademarks as described in Item 13?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
For Carl's Jr. Restaurant franchisees, we grant you the right to operate a restaurant under the name "Carl's Jr." and to use our other current or future trademarks that we designate in the operation of your Franchised Restaurant. By trademarks, we mean trade names, trademarks, trade dress, service marks, logos, insignias, slogans, emblems, symbols, designs and any combination of these or any other indicia of source used to identify and distinguish the Carl's Jr. brand (our "Proprietary Marks"). We own all right, title and interest in and to the Proprietary Marks and you will only have such rights to use the Proprietary Marks as granted to you in the Franchise Agreement.
Our Proprietary Marks include both registered and unregistered marks. Registered marks are marks that have been registered with the United States Patent and Trademark Office ("USPTO") and enjoy the protections of federal registration. Unregistered marks may include short term product marks (LTOS or similar promotions), trade dress, or other marks that, while not registered, are protected by common law based upon our use of the marks. In addition to other registered trademarks, we own the following principal trademarks ("Principal Trademarks") that have been registered with the USPTO on the Principal Register, and any applicable required affidavits of continued use have been filed and accepted:
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, franchisees are granted the right to operate a restaurant under the "Carl's Jr." name and use other trademarks designated by the company. These trademarks include trade names, service marks, logos, slogans and designs that distinguish the Carls Jr. brand. Carls Jr. retains ownership of all rights, title, and interest in these Proprietary Marks, and franchisees' rights to use them are limited to what is specified in the Franchise Agreement. This means a franchisee can only use the trademarks in the manner and context that Carls Jr. allows.
Carls Jr.'s Proprietary Marks include both registered and unregistered trademarks. Registered marks are protected by federal registration with the United States Patent and Trademark Office (USPTO). Unregistered marks, such as short-term product marks or trade dress, are protected by common law based on the company's use of the marks. This distinction is important because it clarifies that Carls Jr. actively protects its brand identity through legal means, and franchisees must respect these protections.
Item 13 emphasizes that Carls Jr. owns all rights to the Proprietary Marks, and the franchisee only has the right to use them as granted in the Franchise Agreement. This underscores that franchisees cannot alter or misuse the trademarks in any way that could harm the brand's image or create confusion among customers. The FDD excerpt does not include Item 9, so it is not possible to determine the franchisee's obligations regarding the use of trademarks as described in Item 9. A prospective franchisee should review Item 9 of the FDD to fully understand their obligations regarding the use of trademarks.