Under the Gold Star franchise agreement, can a franchisee represent that they have ownership of the Marks in advertising?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE shall use the Marks and the System only in connection with the Business and expressly agrees that any and all use of the Marks and the System by the FRANCHISEE, and all goodwill associated therewith, inures directly and exclusively to the benefit of the COMPANY. FRANCHISEE acknowledges that the COMPANY is the owner of the Marks and all goodwill associated therewith; valuable goodwill is associated with the Marks; and the Marks are valid. FRANCHISEE agrees not to contest or aid in contesting, directly or indirectly, the validity, ownership or enforceability of the Marks during and after the term of this Agreement or any extension or renewal thereof. Whenever FRANCHISEE uses the Marks, it will clearly indicate the COMPANY's ownership thereof. Apart from the non-exclusive right of FRANCHISEE to use the Marks pursuant to the terms of this Agreement, FRANCHISEE shall acquire no right, title or interest of any kind or nature whatsoever in or to the Marks and FRANCHISEE may not represent that it has
- any ownership of the Marks in advertising or otherwise.
FRANCHISEE shall acquire no right, title or interest in or to the goodwill associated with the Marks.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to the 2025 Gold Star Franchise Disclosure Document, franchisees are explicitly prohibited from representing that they have any ownership of the Gold Star Marks in their advertising or otherwise. The agreement states that all use of the Marks and the associated goodwill benefits Gold Star exclusively. Franchisees acknowledge that Gold Star owns the Marks and that they will not contest the validity, ownership, or enforceability of the Marks.
This means that while franchisees are granted a non-exclusive right to use the Gold Star Marks to operate, advertise, and promote their business, they do not acquire any ownership rights to the Marks or the associated goodwill. Franchisees must clearly indicate Gold Star's ownership whenever they use the Marks.
This provision is standard in franchising, as the franchisor needs to protect its brand identity and ensure consistent messaging across all franchise locations. A prospective Gold Star franchisee should understand that they are essentially licensing the brand and its associated intellectual property, and they cannot claim any ownership stake in it.