What happens if a Hyper Kidz franchisee makes unauthorized use of the marks?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
effect which significantly limit our right to use or license the use of the Marks in any manner material to you.
Your right to use the Marks is derived solely from the Franchise Agreement and is limited to your operation of a Hyper Kidz Business in compliance with the Franchise Agreement and all applicable standards, specifications and operating procedures we prescribe during the term of the Franchise Agreement. Any unauthorized use of the Marks by you constitutes a breach of the agreement and an infringement of our rights in and to the Marks. Your use of the Marks and any goodwill established by your use will be for our exclusive benefit. All provisions of the Franchise Agreement applicable to the Marks will apply to any other trademarks, service marks, commercial symbols and trade dress we authorize in writing for use by and licensed to you after you sign the Franchise Agreement.
You must use the Marks as the sole trade identification of the Hyper Kidz Business and must identify yourself in the form we prescribe as the independent owner of the Hyper Kidz Business. You may not use any Mark or variation thereof as part of any corporate name or with any prefix, suffix, or other modifying words, terms, designs, or symbols, or in any modified form. You may not use any Mark or any variation of it in connection with the performance or sale of any unauthorized services or products, as part of your corporate name, as part of the domain name or address of a website, or in any other manner we have not expressly authorized in writing. You must display the Marks prominently in the manner we prescribe. You must give notices of trademark and service mark registrations that we specify and obtain business name registrations as required under applicable law. You must place notices at your Franchised Business that state your Franchised Business is independently owned and operated, and we reserve the right to specify where the notices must be placed.
You must immediately notify us of any apparent infringement of or challenge to your use of any Mark or claim by any person of any rights in any Mark. You may not communicate with anyone except us and our counsel with respect to any infringement, challenge or claim. We will have sole discretion to take any action we deem appropriate in connection with any infringement, challenge or claim, and we have the sole right to exclusively control any litigation or other proceeding arising out of any infringement, challenge or claim relating to any Mark. You must sign any and all instruments and documents, give assistance, and do any acts and things as may in the opinion of our counsel be necessary or advisable to protect and maintain our interests in any litigation or proceeding or otherwise to protect and maintain our interests in the Marks. We will reimburse you for the reasonable out-of-pocket expenses you incur and pay in complying with these requirements; except if any action we take with respect to any claim or proceeding results in any
monetary recovery for you which exceeds your costs, then you must pay your own costs and share pro-rata in our costs up to the amount of the monetary recovery.
The Franchise Agreement does not require us to take affirmative action when notified of any infringements of or challenges to the Marks, but we intend to vigorously defend the Marks. We have the right to control any litigation or administrative proceedings involving the Marks.
Source: Item 13 — TRADEMARKS (FDD pages 36–38)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, a franchisee's right to use the Hyper Kidz trademarks is strictly governed by the Franchise Agreement. This right is specifically limited to operating a Hyper Kidz business in compliance with the agreement and all standards and operating procedures set by Hyper Kidz. Any deviation from these terms constitutes a breach of contract and an infringement of Hyper Kidz's trademark rights. The FDD emphasizes that all goodwill established through the franchisee's use of the marks will exclusively benefit Hyper Kidz.
Hyper Kidz is very specific about how franchisees can and cannot use their trademarks. Franchisees must use the marks as the sole trade identification for their Hyper Kidz business and identify themselves as independent owners in a prescribed form. Franchisees are prohibited from using any mark or variation of it as part of their corporate name, or with any prefix, suffix, or other modifying elements, unless expressly authorized in writing by Hyper Kidz. This includes restrictions on using the marks in connection with unauthorized services or products, as part of a domain name, or in any other manner not explicitly approved.
Hyper Kidz retains the right to direct franchisees to modify or discontinue the use of any mark if deemed necessary. Franchisees are obligated to comply immediately with such directives, including adopting additional or substitute trademarks or trade dress. It's important to note that Hyper Kidz is not obligated to reimburse franchisees for any expenses incurred due to these changes. Franchisees must also notify Hyper Kidz of any apparent infringement or challenge to the use of any mark and must cooperate fully in any legal proceedings, with Hyper Kidz maintaining sole discretion over legal action related to the marks. While Hyper Kidz intends to vigorously defend its marks, the Franchise Agreement does not mandate affirmative action in response to infringements or challenges.