Do the obligations in Section 16 of the Gokhale Method Franchise Agreement survive termination?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
our notice.
16. OBLIGATIONS UPON TERMINATION OR EXPIRATION
Upon termination or expiration of this Agreement for any reason, all rights granted hereunder to you shall forthwith terminate, and:
- 16.1. Cease Operations. You shall immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly, represent to the public or hold yourself out as a present or former Gokhale Method Franchised Business. Immediately upon the expiration or termination hereof, you shall dispose of, and not transfer to anyone other than us, any Gokhale Method products, equipment or other items sold hereunder
- 16.2. Cease Use of Confidential Information and Marks. You shall immediately and permanently cease to use, in any manner whatsoever, any of our Intellectual Property, including but not limited to Confidential Information, methods, procedures and techniques associated with the System, and all Marks and distinctive forms, slogans, signs, symbols, colors, and devices associated with the System. In particular, you shall cease to use, without limitation, all signs, advertising materials, displays, stationery, forms, products and any other articles that display the Marks. You shall de-identify the Location of the Franchised Business so that there is no use or display of the Marks after the effective date of termination or expiration.
- 16.3. Cancellation of Registrations. You shall take such action as may be necessary to cancel any assumed name registration or equivalent registration obtained by you which contains the "Gokhale" word, or any other Marks, and you shall furnish us with evidence satisfactory to us of compliance with this obligation within five (5) days after termination or expiration of this Agreement.
- 16.4. Assignment of Lease. You shall, at our option, except in the event you continue to operate any other business you were operating from the same Location assign to us any interest which you have in any lease or sublease for the Location. In the event we do not elect to exercise our option to acquire the lease or sublease for the Location, you shall make such modifications or alterations to the Location (including, without limitation, the changing of, and the assigning to us of, the telephone number) immediately upon termination or expiration of this Agreement as may be necessary to distinguish the appearance of the Location from that of the Franchised Business under the System, and shall make
such specific additional changes thereto as we may reasonably request for that purpose. In the event you fail or refuse to comply with the requirements of this Section 16.4, we shall have the right to enter upon the Location, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at the expense of you, which expense you agree to pay upon demand.
- 16.5. Subsequent Use of Marks Prohibited. You agree, in the event you continue to operate or subsequently begin to operate any other business, not to use any reproduction, counterfeit, copy or colorable imitation of the Marks, either in connection with such other business or the promotion thereof, which, in our sole business judgment, is likely to cause confusion, mistake or deception, or which, in our sole business judgment, is likely to dilute our rights in and to the Marks. You further agree not to utilize any designation of origin, description or representation (including but not limited to reference to Gokhale Method Institute, the System or the Marks) which, in our sole business judgment, suggests or represents a present or former association or connection with us, the System or the Marks.
- 16.6. Payment. You shall promptly pay all sums owing to us and our Affiliates. In the event of termination due to your default, such sums shall include all damages, costs, and expenses, including reasonable attorneys' fees, incurred by us as a result of the default, which obligation shall give rise to and remain, until paid in full, a lien in our favor against any and all of the personal property, furnishings, equipment, signs, fixtures, and inventory owned by you and at the Location operated hereunder at the time of default.
- 16.7.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, Section 16 of the Franchise Agreement outlines obligations that the franchisee must comply with upon termination or expiration of the agreement. These obligations include ceasing operations as a Gokhale Method franchised business, discontinuing the use of Gokhale Method's intellectual property and marks, canceling any registrations containing the 'Gokhale' word or other marks, and at the franchisor's option, assigning the lease for the business location to Gokhale Method.
Additionally, the franchisee must cease using any domain names, URLs, email addresses, or home page addresses associated with Gokhale Method and provide Gokhale Method with hard copies of the Teacher's Manual or Policy Statements, as well as any electronic records that contain Confidential Information. Gokhale Method also has the option to purchase the franchisee's equipment, signs, inventory, materials, supplies, and fixtures related to the franchised business.
Furthermore, the franchisee is obligated to comply with the covenants outlined in Section 17 of the agreement, which include in-term and post-term covenants. The post-term covenants specify that for a period of two years following the termination of the franchise agreement and within a 10-mile radius of the former location, the franchisee cannot engage in any competitive business. These obligations and covenants ensure the protection of Gokhale Method's brand, confidential information, and market presence even after a franchise agreement ends.