Who do all rights in and goodwill from the use of the Marks accrue to for Red Wagon Club?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
We license the Marks from RWC IP under a License Agreement dated June 27, 2024 (the "License Agreement"). The term of the License Agreement will continue for 99 years from its effective date unless terminated. The License Agreement may be terminated (resulting in the loss of our right to use and to sublicense the use of the Marks to you) by mutual agreement of the parties, or by RWC IP for a number of reasons, including if we default on any obligations, we are dissolved, make an assignment for the benefit of creditors, become insolvent, consent to appointment of a receiver, or our business is seized, or the parties cease to be affiliates. All rights in and goodwill from the use of the Marks accrue to RWC IP. Except as described above, no agreement significantly limits our rights to use or sublicense the Marks in a manner material to the franchise.
Source: Item 13 — TRADEMARKS (FDD pages 34–35)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, all rights and goodwill stemming from the use of the trademarks accrue to RWC IP. Red Wagon Club licenses the trademarks from RWC IP under a License Agreement dated June 27, 2024, which has a term of 99 years unless terminated.
This means that while franchisees are granted a non-exclusive license to use the Red Wagon Club marks to operate their business, they do not own the trademarks themselves. The License Agreement can be terminated by mutual agreement or by RWC IP if Red Wagon Club defaults on obligations, becomes insolvent, or ceases to be an affiliate. If the License Agreement is terminated, Red Wagon Club would lose the right to sublicense the use of the Marks to franchisees.
This arrangement is fairly common in franchising, where the franchisor or a related entity retains ownership of the trademarks to maintain brand consistency and control. As a Red Wagon Club franchisee, you must use the marks according to the Franchise Agreement and System Standards and identify yourself as an independent owner. You cannot use the marks as part of your corporate name or with unauthorized modifications. Your use of the marks and any goodwill established by that use are exclusively for the benefit of Red Wagon Club and RWC IP.