What is Fitstop's obligation to maintain federal registrations of its trademarks with the USPTO?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 13 — TRADEMARKS (FDD pages 37–38)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop has worked with the TM Owner to file any necessary affidavits and other documents with the USPTO to maintain the federal registrations of its trademarks. As of the issue date of the FDD, Fitstop IP Pty. Ltd. owns the registered trademarks, including FITSTOP® (Registration No. 7,077,393, registered June 13, 2023) and FITSTOP® (Registration No. 7,288,609, registered January 23, 2024) on the Principal Register of the USPTO. Fitstop maintains the right to use and license its system franchisees the right to use the registered marks 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.
This arrangement ensures that Fitstop franchisees can use the trademarks to operate their businesses. The perpetual, royalty-free license agreement between Fitstop and the TM Owner provides that the TM Owner will continue to license such Proprietary Marks directly to System franchisees in the event the agreement is terminated for any reason. This agreement protects the franchisees' rights to use the trademarks even if the primary agreement between Fitstop and the TM Owner ends.
Fitstop also requires franchisees to comply strictly with its standards, specifications, rules, requirements, and instructions regarding the use of the Marks. Franchisees must notify Fitstop immediately if they become aware of any unauthorized use of the Marks. Fitstop will indemnify, defend, and hold harmless the franchisee in connection with any third-party claims arising solely out of the franchisee's authorized use of any Marks in the manner Fitstop prescribes, provided the franchisee notifies Fitstop of the proceeding within three days and complies with Fitstop's directions regarding the proceeding. However, Fitstop will not reimburse franchisees for their expenses and legal fees for separate, independent legal counsel unless Fitstop approves of the use of such counsel in writing prior to the franchisee engaging counsel, nor will they reimburse for disputes where Fitstop challenges the franchisee's use of the Marks.
Fitstop may instruct franchisees to modify or discontinue using any of the Marks and add new names, designs, logos, or commercial symbols to the Marks. Fitstop may impose changes whenever it believes the change is advisable and does not have to compensate franchisees for any costs incurred to make the required changes. Franchisees will receive written notice of any change and will be given a reasonable time to conform to Fitstop's directions, including changing signage, marketing displays, trade dress, and other advertising, at their sole expense.