Who owns the trademarks licensed for use in connection with franchising Extreme Art Studio Businesses?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
5.1 OWNERSHIP AND GOODWILL OF MARKS. Our affiliate ("Trademark Owner") has licensed the Marks to us to use in connection with the franchising of Extreme Art Studio Businesses. Your non-exclusive right to use the Marks is derived only from this Franchise Agreement and limited to your operating the Franchised Business according to this Franchise Agreement and all System Standards we prescribe during its term. Your unauthorized use of the Marks is a breach of this Franchise Agreement and infringes the Trademark Owner's and our rights in the Marks. You acknowledge and agree that any unauthorized use of the Marks will cause us and the Trademark Owner irreparable harm for which there is no adequate remedy at law and will entitle us and the Trademark Owner to injunctive relief. You acknowledge and agree that your use of the Marks and any goodwill established by that use are exclusively for our and the Trademark Owner's benefit, and that this Franchise Agreement does not confer any goodwill or other interests in the Marks upon you (other than the right to operate the Franchised Business under this Franchise Agreement). All provisions of this Franchise Agreement relating to the Marks apply to any additional proprietary trade and service marks we authorize you to use. You may not at any time during or after this Franchise Agreement's term, contest or assist any other person in contesting the validity, or our and the Trademark Owner's ownership, of the Marks.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the trademarks, logotypes, and service marks (referred to as "Marks") are licensed to Extreme Art Studio Franchising, LLC for use in franchising Extreme Art Studio businesses. However, these Marks are owned by Extreme Art Studio's affiliate, referred to as the "Trademark Owner." The franchisee's right to use these Marks is non-exclusive and is derived solely from the Franchise Agreement, limited to operating the franchised business according to the agreement and system standards. Unauthorized use of the Marks constitutes a breach of the Franchise Agreement and infringes upon the rights of both the Trademark Owner and Extreme Art Studio.
Extreme Art Studio emphasizes that any goodwill established through the franchisee's use of the Marks benefits the Trademark Owner and Extreme Art Studio. The Franchise Agreement does not grant the franchisee any goodwill or other interests in the Marks, other than the right to operate the franchised business under the agreement. Franchisees are prohibited from contesting the validity or ownership of the Marks during and after the term of the Franchise Agreement.
This arrangement is typical in franchising, where the franchisor licenses trademarks from an affiliated entity. This structure allows the affiliate to maintain control over the brand's intellectual property while granting the franchisor the right to sublicense it to franchisees. Prospective franchisees should understand that they are using the Extreme Art Studio brand under a limited license and do not acquire any ownership rights in the trademarks themselves.