Upon termination of the Franchise Agreement, what must a Management Recruiters franchisee do regarding the Secondary Name?

According to Management Recruiters' 2024 Franchise Disclosure Document, a franchisee must cease using the Secondary Name upon termination of the Franchise Agreement for any reason. This requirement is the same as the obligation to stop using the Management Recruiters' Marks. The franchisor grants the franchisee the right to use a Secondary Name, assuming the franchisor has approved it in writing. The approval of any Secondary Name is at the franchisor's sole discretion, and they may impose conditions on its use as they deem necessary or advisable.

This means that a franchisee cannot continue to operate under the Secondary Name once the agreement ends. This is a standard clause in franchise agreements, as the brand and associated names are proprietary to the franchisor. The franchisee's right to use the Secondary Name is solely for the operation of the franchise business under the terms of the agreement.

Prospective franchisees should consider the implications of this clause, especially if they have built up local recognition under the Secondary Name. While Management Recruiters permits the use of a Secondary Name, the franchisee does not develop any lasting equity in that name that they can continue to use independently after the franchise term. Franchisees should ensure they understand the conditions attached to using a Secondary Name and how this cessation of use might impact their business if they choose not to renew or if the agreement is terminated.