Does the non-disparagement clause extend to any business using the Marks of Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.6 NON-DISPARAGEMENT.
You agree not to (and to use your best efforts to cause your current and former shareholders, members, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, affiliates, successors and assigns, not to) disparage or otherwise speak or write negatively, directly, or indirectly, of us, our affiliates, any of our or our affiliates' directors, officers, employees, representatives or affiliates, current and former franchisees of us or our affiliates, the Extreme Art Studio brand, the System, any Extreme Art Studio Business, any business using the Marks, any other brand or service-marked or trademarked concept of us or our affiliates, or which would subject the Extreme Art Studio brand or such other brands to ridicule, scandal, reproach, scorn, or indignity, or which would negatively impact the goodwill of us, the Extreme Art Studio brand, or such other brands.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the non-disparagement clause extends to any business using the Marks of Extreme Art Studio. This means that franchisees, along with their current and former shareholders, members, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, affiliates, successors, and assigns, are prohibited from making negative statements about any business using Extreme Art Studio's trademarks, service marks, or trade names.
This clause prevents franchisees and related parties from publicly criticizing not only Extreme Art Studio itself, but also any other business that utilizes its Marks. The restriction includes both direct and indirect disparagement, whether spoken or written. The aim is to protect the goodwill and reputation of the Extreme Art Studio brand and any other brands or concepts affiliated with it.
For a prospective franchisee, this means they must ensure that anyone associated with their business understands and adheres to this non-disparagement obligation. Failure to comply could result in legal repercussions or damage to the franchise agreement. This type of clause is relatively common in franchise agreements to protect the brand's reputation and maintain consistency across the franchise system.