Sample Franchise Disclosure Document – Item 13: Trademarks Example


We grant you the right to operate a shop under the name “Belmont Muffler Shop.” You may also use our other current or future trademarks to operate your shop. By “trademark,” we mean trade names, trademarks, service marks, and logos used to identify your shop. W e registered the trademark on the United States Patent and Trademark Office principal register on May 11, 1993, as Number 379286.

You must follow our rules when you use these marks. You cannot use a name or mark as part of a corporate name or with modifying words, designs, or symbols, except for those which we license to you. You may not use Belmont’s registered name in connection with the sale of any unauthorized product or service, or in a manner that we have not authorized in writing.

On June 4, 2003, the United States Patent and Trademark Office rejected Belmont’s application to register the mark “Super Mufflers” because the mark was found to be confusingly similar to a previously registered mark.

Our inability to register this mark on the federal level permits others to establish rights to use the Super Mufflers mark. Such use of the Super Mufflers mark does not occur in areas where our franchisees are operating or advertising under the mark, or in the natural zone of expansion for Belmont’s shops. In addition, others outside the Belmont system who use the Super Mufflers mark must act in good faith and without actual knowledge of our prior use of the mark. However, if others establish rights to use the Super Mufflers mark, we may not be able to expand into these areas using that mark.

No agreements limit our right to use or license the use of Belmont’s trademarks. You must notify us immediately when you learn about an infringement of, or challenge to, your use of our trademark. We will take the action we think appropriate. While we are not required to defend you against a claim against your use of our trademark, we will reimburse you for your liability and reasonable costs in connection with defending our trademark. To receive reimbursement you must have notified us immediately when you learned about the alleged infringement or challenge.

You must modify or discontinue the use of a trademark if we modify or discontinue using it. If this happens, we will reimburse you for your tangible costs of compliance (for example, changing signs). You must not directly or indirectly contest our right to our trademarks, trade secrets, or business techniques that are part of our business.

Richard R. Roe is currently doing business as Belmont Muffler Shoppe at 4231 Main Street, Reno, Nevada. W e believe that this is an infringing use of our federally registered trademark “Belmont Muffler Shop,” and we have filed an action to enjoin Mr. Roe and to recover damages. If the court holds that Mr. Roe’s use is not infringing, Belmont may not be able to use Belmont’s trademark in Mr. Roe’s immediate area. (Belmont Muffler Shop v. Belmont Muffler Shoppe, No. 8899 (D. Nev. filed April 15, 2006).

CREDIT: The content of this post has been copied or adopted from the Federal Trade Commission’s Franchise Rule Compliance Guide.

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