During and after the term of the agreement, is a Craters & Freighters franchisee allowed to contest the validity of the Marks?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.3 No Contest. Franchisee agrees that, during the term of this Agreement and after its termination or expiration and non-renewal, Franchisee will not directly or indirectly contest or aid in contesting the validity of the Marks or the ownership or rights of the Marks by Franchisor. Furthermore, Franchisee intends and hereby concedes that any commercial use Franchisee may make of the Marks will contribute and inure to the commercial use and benefit of Franchisor, which Franchisor may claim to strengthen and further secure ownership of the Marks. In the event that Franchisee acquires any rights, title or interest in the Marks, Franchisee agrees to assign and hereby assigns all such rights, title, or interest to Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, franchisees are prohibited from contesting the validity of the brand's trademarks, both during and after the agreement. The agreement explicitly states that the franchisee acknowledges Craters & Freighters' exclusive ownership of the Marks and the associated goodwill. The franchisee's use of the Marks is limited to the operation of the franchised business and only includes Marks designated by Craters & Freighters.
This restriction means a Craters & Freighters franchisee cannot legally challenge Craters & Freighters' ownership or rights to its trademarks, even after the franchise agreement expires or is terminated. Any commercial use of the Marks by the franchisee is considered to benefit Craters & Freighters, reinforcing their ownership. Should the franchisee acquire any rights to the Marks, they must assign those rights to Craters & Freighters.
This type of clause is standard in franchise agreements to protect the franchisor's brand identity and intellectual property. By agreeing to this, a franchisee acknowledges the value and legality of the Craters & Freighters trademarks and commits to not undermining them. This ensures consistency and uniformity across the Craters & Freighters network and prevents franchisees from claiming ownership or creating confusion in the marketplace.