What is the nature of the license agreement between Fitstop and the TM Owner regarding the use of the registered marks?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
e 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. During the term of the Franchise Agreement and continuing after the expiration or termination of the Franchise Agreement, neither you nor any of your managers will, directly or indirectly, contest, challenge or assist in the contesting or challenging of, our right, title, ownership, or interest in our Marks, trade secrets, methods, procedures, and advertising techniques that are part of our franchise System, or contest our sole right to register, use, or license others to use, our Marks, trade secrets, methods, procedures, advertising techniques, and any other mark or name that incorporates the terms "Fit" or "Stop" and/or any similar phrase.
You must immediately notify us in writing if you become aware of any unauthorized use of our Marks or other proprietary information and you must permit us to participate in any litigation involving you and our Marks. We will take the action we think appropriate.
Source: Item 13 — TRADEMARKS (FDD pages 37–38)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop has a license agreement with TM Owner, Fitstop IP Pty. Ltd., established in 2022, that grants Fitstop the right to use and sublicense its trademarks to franchisees. This license is perpetual and royalty-free. The agreement ensures that even if the primary agreement between Fitstop and TM Owner is terminated, TM Owner will continue to license the proprietary marks directly to Fitstop franchisees. This arrangement aims to provide franchisees with long-term security in using the Fitstop trademarks. The registered trademarks include FITSTOP® with registration numbers 7,077,393 (registered on June 13, 2023) and 7,288,609 (registered on January 23, 2024).
Fitstop grants franchisees a limited, non-exclusive license to use the designated proprietary marks to identify their franchised business, provided the marks are used as outlined in the Franchise Agreement and the manuals. Franchisees cannot use the marks as part of their company name without permission, nor can they modify the marks without Fitstop's consent. The franchisee must adhere to Fitstop's standards for using the marks, and all goodwill associated with the marks remains Fitstop's exclusive property.
Franchisees must notify Fitstop of any unauthorized use of the marks and allow Fitstop to participate in any related litigation. Fitstop will defend and indemnify franchisees against third-party claims arising from the authorized use of the marks, provided the franchisee notifies Fitstop of the claim within three days and complies with Fitstop's directions. However, Fitstop will not cover the franchisee's expenses for independent legal counsel unless Fitstop has approved the counsel in writing. Fitstop also retains the right to require franchisees to modify or discontinue using any of the marks, with changes implemented at the franchisee's sole expense after receiving written notice and a reasonable time to conform.