Does termination of the City Wide Franchise Agreement relieve the franchisee of obligations relating to the use of marks?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.1 Termination of this Agreement will not relieve Franchisee of any right, duty, covenant, or obligation relating to the use of the Marks, the Software, the confidentiality and use of the Confidential Information, the maintenance of statements and records and inspection and auditing of records, covenants relating to non-competition, and other Franchisee covenants, Franchisee's post-term obligations, indemnification, and independent contractor status, the availability of equitable relief and payment of costs and expenses, governing law and dispute resolution, severability and construction, and acknowledgments under the Franchise Agreement or any other Agreement.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, termination of the Franchise Agreement does not relieve the franchisee of obligations regarding the use of City Wide's marks. Section 15.1 of the agreement specifies that the franchisee's duties relating to the use of the marks survive the termination of the agreement. This means that even after the agreement ends, the franchisee must still adhere to the rules and restrictions City Wide sets regarding its trademarks and service marks.
Specifically, Section 5 of the Franchise Agreement details the franchisee's obligations concerning the marks. This includes acknowledging City Wide's ownership and rights to the marks, using the marks only as authorized, and refraining from any actions that could infringe upon or damage City Wide's rights. The franchisee also agrees not to contest the validity or ownership of the marks during or after the term of the agreement.
Furthermore, upon termination, Section 15.2.1 requires the franchisee to immediately cease operating as a City Wide franchisee and discontinue using any part of the City Wide system or marks. The franchisee cannot represent themselves as connected to the City Wide system. These post-termination obligations are designed to protect City Wide's brand and goodwill, ensuring that former franchisees do not misuse the marks or create confusion in the marketplace. This is a standard practice in franchising, as franchisors need to maintain control over their brand identity and prevent unauthorized use of their trademarks.