Does the Red Wagon Club franchisee grant the franchisor a license?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
es to acquire from Franchisee a sublicense to use the Marks and certain of Franchisor's proprietary materials (the "Licensed Materials") associated with the Red Wagon ClubTM brand (the "Brand"); and
WHEREAS, it is a condition of Franchisor's grant of the Franchise Agreement to Franchisee and Franchisee's continued operation of Franchisee's RWC Business that the Parties enter into this Agreement and deliver a fully executed copy to Franchisor.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
- Term. The term of this Agreement (the "Term") will commence on the Effective Date and, subject to sooner termination as provided herein, shall expire on the termination or expiration of the Franchise Agreement.
2. License.
- (a) Grant. Subject to the terms of this Agreement, Franchisee hereby grants Licensee a limited, non-exclusive, and non-transferrable right and sublicense to use the Marks and Licensed Materials during the Term strictly in connection with the operation of Licensee's Law Firm Business pursuant to the terms and conditions of this Agreement and for no other purpose. Franchisee shall provide Licensee digital copies or access to the Licensed Materials and Licensee must use the Licensed Materials without modification unless otherwise consented to in writing by Franchisor. Licensee acknowledges and agrees that Franchisor may modify the Marks and Licensed Materials from time to time in its sole discretion. Franchisee will notify Licensee in writing of such changes to the Marks and Licensed Materials that Franchisee receives from Franchisor, and immediately upon Licensee's receipt of such notice, Licensee will implement the required changes in accordance with the terms of this Agreement.
- (b) No Right to Sublicense. The rights and license granted to Licensee herein do not confer to Licensee the right to grant to others the right
Source: Item 23 — RECEIPTS (FDD pages 47–142)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, the franchisee grants a license to a Licensee, not the franchisor. Specifically, the franchisee grants a sublicense to use Red Wagon Club's marks and licensed materials to a Licensee who owns and operates a law firm business. This sublicense allows the law firm to use the Red Wagon Club brand in connection with their business.
The grant of this sublicense is subject to several conditions. The license is limited, non-exclusive, and non-transferable, meaning the Licensee can only use the marks and materials for their law firm business and cannot transfer the license to anyone else. The Licensee must use the materials without modification unless the franchisor provides written consent. The franchisor retains the right to modify the marks and licensed materials, and the franchisee is obligated to notify the Licensee of any changes.
All rights to the marks and licensed materials, including goodwill and derivative works, remain the exclusive property of the franchisor. The Licensee's use of these materials benefits the franchisor. The Licensee does not have the right to sublicense the marks or licensed materials to others. This arrangement ensures that the franchisor maintains control over its brand and how it is used, even when a sublicense is granted to a third party.