Does the Fitstop Franchise Agreement specify how the Fitstop Marks should be used?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
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ITEM 13: TRADEMARKS
We grant you a limited, non-exclusive license to use our then-current Proprietary Marks (or "Marks") we designate to identify your Franchised Business, such as our current primary mark FITSTOP® and certain other Marks we authorize at this time provided you use these Marks as outlined in your Franchise Agreement(s) and our Manuals.
As of the Issue Date our affiliate, Fitstop IP Pty. Ltd. (the "TM Owner"), owns the following marks that are registered on the Principal Register of the United States Patent and Trademark Office ("USPTO"):
| Mark | Registration No. | Registration Date | |---|---|---| | FITSTOP® | 7,077,393 | June 13, 2023 | | FITSTOP® | 7,288,609 | January 23, 2024 | As of the Issue Date, we have worked with TM Owner to file any affidavits and other documents with the USPTO to maintain the federal registrations described above.
We have the right to use, and license our System franchisees the right to use, the registered marks above and other Proprietary Marks in connection with the franchise system and System Businesses pursuant to a perpetual, royalty-free license agreement with TM Owner entered into in 2022— which provides, among other things, that the TM Owner will continue to license such Proprietary Marks directly to System franchisees in the event this agreement is terminated for any reason. Except for this license agreement, we are not aware of any contract or agreement that significantly limits our right to use, or license the use of, the Proprietary Marks that are material to the franchise being offered.
You must strictly comply with our standards, specifications, rules, requirements, and instructions regarding the use of the Marks. The goodwill associated with our Marks will remain our exclusive property, and you will receive no tangible benefit from our goodwill, except from the operation or possible sale of the Franchised Business during the term of the Franchise Agreement. Any increase in the goodwill associated with our Marks during the term of the Franchise Agreement will benefit us. All rights to use our Marks will automatically revert to us without cost and without the execution or delivery of any documents, upon the expiration or termination of your Franchise Agreement.
As of the Issue Date of this Franchise Disclosure Document, there is no litigation pending arising out of our Marks, and we are not aware of any superior rights in, or infringing uses of, our Marks that could materially affect your right to use these marks. Presently, there are no effective adverse material determinations of the USPTO, the Trademark Trial and Appeal Board, the trademark administrator of any state or any court, and no pending infringement, opposition or cancellation proceedings or any material litigation involving the Marks. There are no agreements in effect that significantly limit our right to use, or license the use of, the Marks that are material to the franchise.
You may not use all or any portion of our Marks as part of your company name and, without our prior written consent, as part of your trade name or "d/b/a". You may not modify the Marks with words, designs or symbols, except those that we license to you. You may not use our Marks in connection with the sale of an unauthorized product or service or in a manner not authorized in writing by us.
Source: Item 13 — TRADEMARKS (FDD pages 37–38)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the Franchise Agreement and the Manuals outline how franchisees should use Fitstop's proprietary marks. Fitstop grants franchisees a limited, non-exclusive license to use their designated marks, such as FITSTOP®, to identify their franchised business, provided they adhere to the guidelines in the Franchise Agreement and the Manuals. Franchisees must strictly comply with Fitstop's standards, specifications, rules, requirements, and instructions regarding the use of the marks.
Fitstop retains exclusive ownership of the goodwill associated with its marks, and any increase in this goodwill during the Franchise Agreement term benefits Fitstop. Upon expiration or termination of the Franchise Agreement, all rights to use Fitstop's marks automatically revert to them without any cost or required documentation. Franchisees cannot use Fitstop's marks as part of their company name or, without prior written consent, as part of their trade name or "d/b/a".
Furthermore, franchisees are prohibited from modifying the marks with unauthorized words, designs, or symbols and cannot use the marks in connection with the sale of unauthorized products or services. Franchisees must also notify Fitstop in writing of any unauthorized use of their marks and allow Fitstop to participate in any related litigation. Fitstop will indemnify and defend franchisees against third-party claims arising from the authorized use of the marks as prescribed, provided the franchisee notifies Fitstop of the proceeding within three days and complies with their directions. Fitstop may require franchisees to modify or discontinue using any of the marks and add new names, designs, logos, or commercial symbols as instructed, without compensation for any incurred costs.