What is the effect of unauthorized use of Devon Creek's Intellectual Property on the franchise agreement?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.1 Franchisee's Obligations. Upon termination or expiration of this Agreement, all rights and licenses granted hereunder to Franchisee shall immediately terminate and Franchisee and each Principal shall:
- 18.1.1 immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly identify himself, herself or itself as a current Devon Creek owner, franchisee or licensee;
- 18.1.2 immediately and permanently cease to use the Marks, any imitation of any Mark, Franchisor's copyrighted material or other intellectual property, confidential or proprietary material or indicia of the Franchised Business, or use any trade name, trade or service mark or other commercial symbol that suggests a current or past association with Franchisor, Licensor, or the System. In particular, Franchisee shall cease to use, without limitation, all signs, billboards, advertising materials, displays, stationery, forms and any other articles, which display the Marks;
- 18.1.3 take such action as may be necessary to cancel any assumed name or equivalent registration that contains the Mark or any other service mark or trademark of Franchisor, and Franchisee shall furnish Franchisor with evidence of compliance with this obligation which is satisfactory to Franchisor, within ten (10) days after termination or expiration of this Agreement;
- 18.1.4 promptly pay all sums owing to Franchisor and its affiliates. Such sums shall include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation herein shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment,
fixtures, and inventory or other business assets owned by Franchisee at the time of default;
18.1.5 pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor for any violation of this Agreement and, subsequent to the termination or expiration of this Agreement, in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement that survive its termination;
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the unauthorized use of its intellectual property can lead to significant consequences for a franchisee. Upon termination or expiration of the franchise agreement, all rights and licenses granted to the franchisee immediately terminate. The franchisee must cease operating the franchised business and cannot identify themselves as a current Devon Creek owner, franchisee, or licensee.
Specifically, the franchisee must immediately and permanently stop using the Devon Creek marks, any imitation of the marks, copyrighted material, or other intellectual property. This includes refraining from using any trade name, service mark, or commercial symbol that suggests an association with Devon Creek. The franchisee is obligated to cease using all signs, advertising materials, displays, stationery, and forms that display the marks.
Furthermore, the franchisee is required to take necessary actions to cancel any assumed name registrations that contain the Devon Creek mark or any other service mark or trademark of the franchisor. Evidence of compliance with this obligation must be furnished to Devon Creek within ten days after termination or expiration of the agreement. The franchisee is also responsible for paying all sums owed to Devon Creek, including damages, costs, and expenses, such as reasonable attorneys' fees, incurred due to any default by the franchisee. This payment obligation creates a lien in favor of Devon Creek against the franchisee's personal property and business assets.
Devon Creek also stipulates that the franchisee must pay all damages, costs, and expenses, including reasonable attorneys' fees, incurred by Devon Creek in connection with obtaining any remedy for violations of the agreement. This includes seeking injunctive or other relief for the enforcement of any provisions of the agreement that survive its termination. These post-termination obligations highlight the importance of adhering to the terms of the franchise agreement and respecting Devon Creek's intellectual property rights to avoid potential legal and financial repercussions.