What are the specific guidelines for using Fitstop trademarks (Item 13), and what are the consequences of violating these guidelines, considering the franchisee's obligations in Item 9?
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.
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are granted a limited, non-exclusive license to use Fitstop's proprietary marks, such as the FITSTOP® trademark, to identify their franchised business. However, this use must strictly adhere to the guidelines outlined in the Franchise Agreement and the Fitstop manuals. Fitstop's affiliate, Fitstop IP Pty. Ltd., owns the registered trademarks. Franchisees gain no tangible benefit from the goodwill associated with the marks, except through the operation or potential sale of their franchise during the agreement term. Any increase in goodwill benefits Fitstop.
The FDD emphasizes strict compliance with Fitstop's standards and instructions regarding trademark use. Upon termination or expiration of the Franchise Agreement, all rights to use the marks automatically revert to Fitstop without any cost or required documentation from the franchisee. Fitstop states that there is no known litigation pending regarding their marks, nor are they aware of any superior rights or infringing uses that could materially affect a franchisee's right to use these marks.
Item 9 outlines the franchisee's obligations, referencing sections in the Franchise Agreement related to trademarks and proprietary information. A significant consequence of violating trademark guidelines is that Fitstop is entitled to seek restraining orders or temporary or permanent injunctions in any court of competent jurisdiction, without bond, to enforce the provisions of the agreement relating to unauthorized use of the Proprietary Marks. This means Fitstop can take immediate legal action to prevent any misuse of their trademarks.
In Minnesota, Fitstop will indemnify franchisees against third-party claims resulting from trademark infringement, provided the franchisee's use of the mark complies with Fitstop's requirements. This protection is conditional on adherence to the franchisor's guidelines. The agreement also stipulates that disputes involving federally protected intellectual property rights in the Proprietary Marks are not subject to mandatory mediation, allowing Fitstop to pursue immediate legal remedies for trademark violations.