Is Devon Creek liable for expenses incurred by the franchisee due to substitution of Marks?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
With respect to Franchisee's use of the Intellectual Property pursuant to this Agreement, Franchisee further agrees that:
- 14.7.1 Unless otherwise authorized or required by Franchisor, Franchisee shall advertise the Franchised Business only under the Marks "Devon Creek" and design.
Franchisee shall not use the Marks, or any portions, variations, or derivatives thereof as part of its corporate or other legal name.
All fictitious names used by Franchisee shall bear the designation "a Devon Creek".
- 14.7.2.
Franchisee shall identify itself as the owner of the Franchised Business and as an independent Devon Creek franchisee in conjunction with any use of the Intellectual Property, including, but not limited to, uses on invoices, order forms, receipts and contracts, as well as the display of a notice in such content and form and at such conspicuous location upon the office and vehicle(s), as directed by Franchisor, used in the Franchised Business, as Franchisor may designate in writing.
- 14.7.3.
Franchisee shall not use the Intellectual Property to incur any obligation or indebtedness on behalf of Franchisor.
- 14.7.4.
Any item offered by Franchisee that contains the Marks, must be approved by Franchisor in writing prior to being distributed or sold by Franchisee and such approval may be granted or denied in Franchisor's sole and absolute discretion.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
Based on the 2024 Devon Creek Franchise Disclosure Document, the document does not explicitly state whether Devon Creek is liable for expenses incurred by the franchisee due to the substitution of Marks. The FDD does outline the franchisee's obligations regarding the use of Devon Creek's intellectual property and marks, as well as the franchisor's right to transfer the agreement and modify service offerings. However, it does not directly address the scenario where the franchisor substitutes the marks and the associated financial responsibilities.
The FDD states that the franchisee must advertise the Franchised Business only under the Marks "Devon Creek" and design, unless otherwise authorized or required by Franchisor. It also states that any item offered by Franchisee that contains the Marks, must be approved by Franchisor in writing prior to being distributed or sold by Franchisee and such approval may be granted or denied in Franchisor's sole and absolute discretion.
Given the absence of a specific clause addressing liability for substitution of marks, prospective Devon Creek franchisees should seek clarification from the franchisor regarding this matter. Specifically, they should inquire about who bears the costs associated with updating signage, marketing materials, and other branded items if Devon Creek decides to change or substitute its marks during the franchise term. Understanding this aspect is crucial for assessing the potential financial risks and responsibilities associated with the franchise.