To whom do all rights in and goodwill from the use of the Chatime Trademarks accrue?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
We have a license from La Kaffa to use and to sublicense the use of the Trademarks in the
continental United States, Hawaii and Guam. This license is set forth in a certain Trademark License Agreement dated September 23, 2022, between La Kaffa and our parent company Chatime Global (including its subsidiaries). It has a term of thirty years and a renewal term of an additional ten years unless terminated earlier by us upon 90 days' notice to La Kaffa. It grants us the right to freely use and display the Trademarks in connection with the operation of our business in the continental United States, Hawaii and Guam. The license may not be assigned by us. All rights in and goodwill from the use of the Trademarks accrue to us and our affiliates. There are no other agreements that significantly limit our right to use or license the use of the Trademarks.
Source: Item 13 — Trademarks (FDD pages 38–40)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, all rights in and goodwill from the use of the Chatime Trademarks accrue to Chatime Global and its affiliates. Chatime has a license from La Kaffa to use and sublicense the trademarks in the continental United States, Hawaii, and Guam. This license is based on a Trademark License Agreement dated September 23, 2022, which spans thirty years with an option to renew for an additional ten years.
This means that while franchisees are granted the right to operate their Chatime stores using the trademarks, they do not own the trademarks themselves. The value and reputation associated with the Chatime brand ultimately benefit Chatime Global and its affiliates. This is a common arrangement in franchising, where the franchisor retains ownership of the brand and trademarks while granting franchisees the right to use them under specific conditions.
For a prospective franchisee, this highlights the importance of maintaining brand standards and protecting the Chatime brand's reputation. Any actions that harm the brand's image could negatively impact the entire franchise system, including the value of the trademarks owned by Chatime Global. Franchisees should also be aware that their right to use the trademarks is dependent on Chatime's continued license from La Kaffa, although the agreement includes a substantial term and renewal option.
The FDD also states that Chatime and La Kaffa have the right to control all administrative proceedings or litigation involving the Trademarks. Franchisees are required to execute any documents and do such acts as may be necessary in Chatime's counsel's opinion to carry out such defense or prosecution. This underscores the franchisor's control over the brand and the franchisee's obligation to cooperate in protecting the trademarks.