Does the agreement not to contest the validity or ownership of Proprietary Marks survive the termination of the Exit franchise agreement?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not directly or indirectly contest or aid in the contesting of the validity or ownership of any of the Proprietary Marks, or take any action which might affect or prejudice Subfranchisor's or EXIT's rights in or to the Proprietary Marks. The foregoing agreement shall survive the termination of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the agreement not to contest the validity or ownership of Exit's Proprietary Marks does indeed survive the termination of the franchise agreement. This means that even after the franchise agreement ends, the franchisee is still legally bound to not challenge Exit's ownership or validity of its trademarks.
This provision protects Exit's brand and intellectual property. It prevents former franchisees from undermining the brand by claiming ownership or disputing the validity of the trademarks. This is a fairly standard clause in franchise agreements, as franchisors need to protect their brand identity and prevent confusion in the marketplace.
For a prospective Exit franchisee, this means understanding that even after leaving the Exit system, they cannot take any action that could harm the brand's trademarks. This includes not only directly contesting the trademarks but also aiding others in doing so. Franchisees should seek legal counsel to fully understand the implications of this clause before signing the franchise agreement.