Who benefits from the goodwill arising from a Chicken Guy franchisee's use of the Proprietary Marks?
Chicken_Guy 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 Licensor, Chicken Guy and their affiliates, that Franchisee shall not directly or indirectly contest the validity or ownership of the Proprietary Marks or Chicken Guy'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 Licensor, Chicken Guy and their affiliates.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy FDD, the goodwill that arises from a franchisee's use of Chicken Guy's Proprietary Marks exclusively benefits Licensor, Chicken Guy, and their affiliates. The franchisee acknowledges that they do not have any right, title, or interest in the Proprietary Marks, except for the right to use them as outlined in the franchise agreement.
This means that while a Chicken Guy franchisee invests time and resources into building their restaurant's reputation and customer base, the increased brand recognition and positive associations ultimately benefit Chicken Guy and its related entities. The franchisee cannot claim ownership of the Proprietary Marks or the goodwill associated with them.
This is a standard practice in franchising, as the franchisor owns the brand and its associated intellectual property. The FDD emphasizes that franchisees are prohibited from contesting the validity or ownership of the Proprietary Marks and cannot seek to register or license them without prior written approval from Chicken Guy. Any unauthorized use of the Proprietary Marks by the franchisee is considered a breach of the franchise agreement and an infringement of Chicken Guy's rights.