According to the Exit franchise agreement, who owns the Proprietary Marks?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
(A) Subfranchisor, having been granted the right to do so by EXIT, grants to Franchisee, and Franchisee accepts, a non-exclusive license to use the Proprietary Marks (as defined in Section 43), for the purpose of operating
a Franchise pursuant to the terms and conditions of this Agreement, and for no other purpose. Subfranchisor and Franchisee expressly agree that ownership, right and title to the Proprietary Marks, regardless of source, are automatically vested in and shall remain solely and exclusively the property of EXIT, and are provided to Franchisee by Subfranchisor in confidence. Franchisee agrees to keep all of the Proprietary Marks in confidence, not infringe on EXIT's rights in the Proprietary Marks, not use them in any manner unless expressly authorized by EXIT, and not disclose them without the prior written consent of Subfranchisor, except as provided in this Agreement. This license is contemporaneous and coterminous with this Agreement and is granted solely in the context of this Agreement. Franchisee shall only use the Proprietary Marks with the SM, TM or ® symbols and designations, as applicable.
(B) Franchisee understands and agrees that its license to use the Proprietary Marks is non-exclusive. EXIT in its sole discretion has the right to grant franchises or licenses to others and to license to others the right to use the Proprietary Marks in addition to those franchises and licenses already granted to other franchisees and subfranchisors. EXIT may develop and license other marks in conjunction with systems other than the EXIT System, on any terms and conditions EXIT deems advisable.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, Exit retains sole and exclusive ownership of the Proprietary Marks. The franchise agreement grants the franchisee a non-exclusive license to use these marks for operating their franchise, but explicitly states that all ownership rights remain with Exit.
This means that while franchisees can use Exit's trademarks, service marks, logos, and other identifying symbols as part of their business, they do not gain any ownership stake in these marks. The franchisee's right to use the Proprietary Marks is tied directly to the franchise agreement; upon termination or expiration of the agreement, the franchisee's right to use the marks ceases.
The agreement also emphasizes that any goodwill associated with the Proprietary Marks, even if it results from the franchisee's efforts, accrues solely to the benefit of Exit. Franchisees are also prohibited from taking any actions that could harm Exit's rights to the Proprietary Marks, reinforcing Exit's control and ownership. This is a common arrangement in franchising, as it protects the brand's identity and reputation, which is essential for maintaining consistency across all franchise locations.