Does the City Wide agreement confer on Franchisee any goodwill or other interests in the Marks?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that all Franchisee's usage of the Marks and any goodwill established by
Franchisee's use of the Marks will inure to the exclusive benefit of CITY WIDE and that this Agreement does not confer on Franchisee any goodwill or other interests in the Marks. Franchisee will not, at any time during the Term of this Agreement or after its termination or expiration, contest the validity or ownership of any of the Marks or assist any other person in contesting the validity or ownership of any of the Marks. All provisions of this Agreement applicable to the Marks also apply to any additional trademarks, service marks, and commercial symbols CITY WIDE authorizes Franchisee to use during the Term of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the franchise agreement does not grant the franchisee any ownership of the goodwill associated with the City Wide marks. The agreement specifies that while franchisees use the marks, any goodwill established through this use benefits City Wide exclusively.
This means that upon termination or expiration of the franchise agreement, the franchisee cannot claim any rights or value related to the goodwill they helped create during the term of their agreement. City Wide retains full ownership and control of its brand and reputation. The franchisee's right to use the marks is solely derived from, and limited to, the terms of the franchise agreement.
This is a common practice in franchising, as it ensures brand consistency and protects the franchisor's intellectual property. Franchisees are essentially licensing the use of the brand and system, but they do not gain equity in the underlying trademarks or goodwill. This reinforces that franchisees operate under the City Wide brand, but the brand equity remains with the franchisor.
Furthermore, the franchisee is prohibited from contesting the validity or ownership of the marks, both during and after the term of the agreement. This provision is designed to protect City Wide's intellectual property rights and prevent franchisees from attempting to undermine the brand's value or claim ownership of the marks.