Franchisor Trademarks and Display of Name Issues

Most franchising companies spend millions of dollars on promoting their brand-name. To insure that the brand-name use used correctly throughout the franchise system, the franchisor must specify to each and every franchised outlet how it must be used. Most franchisors discuss this issue at length during the initial franchise training and have large sections with the rules of the trademarks use in the confidential operations manual.

In our franchise company we took it one step further in that we decided to put in a clause in our franchise agreements prior to the commencement of the opening of the franchise and prior to the signing of the franchise agreements, all franchisees understood exactly how serious we were about this particular issue. I designed this clause, which I put into all of our franchise agreements below;.3.11.2 Display of Name.At the times during the term of this Agreement, Franchisee will use the Marks, in a form and manner approved by Franchisor, in all advertising promotions and communications involving the Franchised Business, including telephone yellow pages listings, Websites, signs, banners, business cards, stationary, promotional and advertising materials, forms, contracts and all other materials which identify the Franchised Business.

Except as provided in this Agreement, Franchisee will not use or give others permission to use the Service Marks, or any colorable imitation of them, combined with any other words or phrases. Franchisee and their shareholders, officers, agents, partners, members or managers will not form or participate in the formation of any company, firm, corporation, or other entity having a name containing the words of the Service Marks. Franchisee may not combine or associate with any name or symbol of the Service Marks with any other name or word in any advertising or sign. The Service Marks must be used in exact conformity with specifications Franchisor sets in the Confidential Operations Manual.All uses of the Marks by Franchisee must be prominently displayed and must clearly state that Franchisee is independently owned and operated.

In the event that Franchisee is expressly permitted by Section 3.3 to own any business(es) other than the Franchised Business unless such business is also a franchise offered by Franchisor, neither Franchisee nor the personnel engaged in such other business(es) may conduct the same under any of the Marks or color schemes of the Franchised Business, or operate in any manner so as to cause confusion of origin or sponsorship between The Car Wash Guys related services and products and the services or products offered or rendered by such other business(es).--- --- ---- --- ---.In doing so I insured the proper use of my federal trademark.

It is advisable for all franchisors to consider an additional clause in their franchise agreements to address this issue also. Therefore you should talk with a competent franchise attorney on this specific issue. I hope you will consider this in 2006.

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By: Lance Winslow