factual

What is the Red Wagon Club Franchisee's obligation regarding the use of the Marks?

Red_Wagon_Club Franchise · 2024 FDD

Answer from 2024 FDD Document

ses, in order to maintain and recover fully a claim for indemnity under this Section. Franchisee agree that a failure to pursue a recovery or mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover under this Section.

13. MARKS.

13.A. OWNERSHIP AND GOODWILL OF MARKS.

Franchisee's right to use the Marks is derived only from this Agreement. Franchisee may only use the Marks to operate Franchisee's RWC Business according to this Agreement and in accordance with System Standards. Franchisee's unauthorized use of the Marks is a breach of this Agreement and infringes Franchisor's rights in the Marks. Franchisee's unauthorized use of the Marks will cause Franchisor irreparable harm for which there is no adequate remedy at law and will entitle Franchisor to injunctive relief. Franchisee acknowledges and agrees that Franchisee's use of the Marks and any goodwill established by that use are exclusively for Franchisor's benefit and this Agreement does not confer any goodwill or other interests in the Marks to Franchisee (other than the right to operate Franchisee's RWC Business under this Agreement). All provisions of this Agreement relating to the Marks apply to any additional proprietary trade and service marks Franchisor authorizes Franchisee to use. Franchisee may not at any time during or after the Term contest or assist any other person in contesting the validity of the Marks or Franchisor's ownership of the Marks.

13.B. LIMITATIONS ON FRANCHISEE'S USE OF THE MARKS.

Except as expressly set forth in the Sublicense Agreement, Franchisee has no right to sublicense or assign Franchisee's right to use the Marks. Franchisee agrees to display the Marks prominently on forms, advertising, supplies, employee uniforms, and other materials associated with Franchisee's RWC Business that Franchisor designate. If Franchisee's RWC Business is operated from a leased commercial space, Franchisee must obtain Franchisor's prior written approval of all signage used at the premises. Franchisee may not use any other trademarks, service marks or commercial symbols to identify or operate Franchisee's RWC Business.

Franchisee agrees to identify itself as the independent owner of Franchisee's RWC Business in the manner Franchisor prescribe. Franchisee may not use any Mark (1) as part of any corporate or legal business

name; (2) with any prefix, suffix, or other modifying words, terms, designs, or symbols (other than logos Franchisor have licensed to Franchisee); (3) in selling any unauthorized services or products; (4) as part of any Online Presence, except in accordance with Franchisor's guidelines set forth in the Operations Manual or otherwise in writing from time to time; (5) in advertising the transfer, sale, or other disposition of Franchisee's RWC Business or an ownership interest in Franchisee; or (6) in any other manner that Franchisor has not expressly authorized in writing.

13.C. NOTIFICATION OF INFRINGEMENT AND CLAIMS.

Franchisee agrees to notify Franchisor immediately of any apparent infringement or challenge to Franchisee's use of any Mark, or of any person's claim of any rights in any Mark, and not to communicate with any person other than Franchisor, its attorneys, and Franchisee's attorneys, regarding any possible infringement, challenge, or claim. Franchisor and/or its affiliates may take any action Franchisor deems appropriate (including no action) and control exclusively any litigation, U.S. Patent and Trademark Office proceeding, or other administrative proceeding arising from any infringement, challenge, or claim or otherwise concerning any Mark. Franchisee agrees to sign any documents and take any other reasonable action that, in the opinion of Franchisor's attorneys, are necessary or advisable to protect and maintain Franchisor's interests in any litigation or Patent and Trademark Office or other proceeding or otherwise to protect and maintain Franchisor's interests in the Marks. Franchisor will reimburse Franchisee for Franchisee's reasonable costs of taking any action that Franchisor has asked Franchisee to take.

13.D. DISCONTINUANCE OF USE OF MARKS.

Franchisor may at any time, in its sole discretion, require Franchisee to modify or discontinue using any Mark and/or use one or more additional or substitute Marks. Franchisee agrees to replace the Marks used for Franchisee's RWC Business with the modified, additional or substitute Marks Franchisor specifies and comply with all other directions Franchisor give regarding the Marks used for Franchisee's RWC Business within a reasonable time after receiving notice from Franchisor. Franchisor is not required to reimburse Franchisee for any costs or expenses associated with making such changes, for any loss of revenue due to any modified or discontinued Mark, or for Franchisee's expenses of promoting a modified or substitute Mark.

Franchisor rights in this Section 13.D apply to any and all of the Marks (and any portion of any Mark) that Franchisor authorizes Franchisee to use in this Agreement. Franchisor may exercise these rights at any time and for any reason, business or otherwise, that Franchisor thinks best. Franchisee acknowledges both Franchisor's right to take this action and Franchisee's obligation to comply with Franchisor's directions.

**13.E.

Source: Item 22 — CONTRACTS (FDD page 47)

What This Means (2024 FDD)

According to the 2024 Red Wagon Club Franchise Disclosure Document, a franchisee's right to use the Red Wagon Club's Marks, including the trademark Red Wagon ClubTM, stems directly from the Franchise Agreement. Franchisees can only use the Marks to operate their Red Wagon Club business as outlined in the agreement and in accordance with the System Standards. Unauthorized use of the Marks constitutes a breach of the agreement and infringes upon Red Wagon Club's rights, potentially leading to irreparable harm and injunctive relief for the franchisor. All goodwill generated through the use of the Marks benefits Red Wagon Club, and the agreement does not grant the franchisee any independent interest in the Marks beyond the right to operate under the agreement.

Red Wagon Club franchisees must display the Marks prominently on forms, advertising, supplies, employee uniforms, and other materials as designated by Red Wagon Club. If the business operates from a leased space, all signage must receive prior written approval from Red Wagon Club. Franchisees cannot use any other trademarks, service marks, or commercial symbols to operate their business. They must identify themselves as the independent owners of the Red Wagon Club business in a manner prescribed by the franchisor.

Furthermore, franchisees face specific limitations on how they can use the Marks. They cannot use any Mark as part of their corporate or legal business name, or with unauthorized modifications. The Marks cannot be used in selling unauthorized services or products, or as part of any online presence, except as explicitly allowed in the Operations Manual. Franchisees must notify Red Wagon Club immediately of any potential infringement or challenges to the use of the Marks and must follow Red Wagon Club's instructions in any related legal proceedings. Red Wagon Club retains the right to require franchisees to modify or discontinue using any Mark at any time, without reimbursing the franchisee for associated costs or lost revenue.

Upon termination or expiration of the Franchise Agreement, the franchisee must immediately cease using all Marks and transfer control of any online presence associated with the Marks to Red Wagon Club. They must also cancel any assumed name registrations related to the Marks. Compliance with these obligations is essential, and Red Wagon Club can take action on behalf of the franchisee to correct any deficiencies. These stipulations ensure that Red Wagon Club maintains strict control over its brand identity and protects its intellectual property rights, while also setting clear expectations for franchisees regarding the authorized and appropriate use of the Marks.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.