What is the relationship between the term of the Exit franchise agreement and the license to use 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.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the franchise agreement and the license to use the Proprietary Marks are directly linked. The non-exclusive license granted to the franchisee to use Exit's Proprietary Marks is specifically for operating a franchise under the terms and conditions of the franchise agreement. This means the franchisee's right to use Exit's trademarks, service marks, logos, and other identifying symbols is tied to the existence and terms of the agreement.
Exit explicitly states that the license to use its Proprietary Marks is "contemporaneous and coterminous" with the franchise agreement. In simpler terms, the license begins when the agreement starts and ends when the agreement ends. The franchisee can only use the Proprietary Marks within the context of the franchise agreement.
This condition is significant for prospective Exit franchisees because it clarifies that the right to use the brand's identity is not independent. If the franchise agreement is terminated for any reason, the franchisee immediately loses the right to operate under the Exit name and utilize its associated trademarks. This underscores the importance of adhering to the terms and conditions of the franchise agreement to maintain the right to operate as an Exit franchise.