FDD Item 13 discloses the franchisor’s trademark rights, and those rights are the foundation of the entire franchise relationship. When you buy a franchise, you are primarily licensing the right to operate under the franchisor’s brand name, logos, and trade dress. If those trademarks are weak, unregistered, or subject to legal challenges, the brand recognition you are paying for may be less valuable than you think. At Lopes Law LLC, our $3,000 FDD validation review includes a trademark analysis of Item 13, because a franchise with strong products but weak trademark protection is a fundamentally riskier investment.

This guide explains what Item 13 requires franchisors to disclose, how to evaluate trademark strength, what risks unregistered or challenged marks present, and what happens to your franchise if the franchisor loses its trademark rights.

What Does FDD Item 13 Require the Franchisor to Disclose?

Under the FTC Franchise Rule, Item 13 must identify each of the franchisor’s principal trademarks, including the brand name, logos, service marks, and trade names. For each mark, the FDD must disclose whether the mark is registered with the U.S. Patent and Trademark Office (USPTO), the registration number and date, whether the mark is on the Principal Register or the Supplemental Register, whether any required maintenance filings (such as Section 8 and 15 affidavits) have been made, any known superior rights (third parties who used the mark first in a specific geographic area), any pending infringement actions or challenges, and any agreements that limit the franchisor’s rights to use or license the marks.

Item 13 must also disclose the franchisor’s obligation to protect the marks against infringement and whether the franchisor has agreed to indemnify franchisees if a third party challenges the franchisee’s use of the marks.

Why Does Trademark Strength Matter for Your Franchise Investment?

The franchise brand is typically the single most valuable asset in the franchise relationship. When you pay a $30,000 to $50,000 franchise fee and commit $200,000 to $500,000 in total investment, a significant portion of that value is attributable to the right to operate under a recognized brand name. If the brand’s trademark protection is weak, your investment is at greater risk for several reasons.

First, weak trademark protection means competitors can potentially operate under similar names in your market. If a local business is using a name similar to your franchise brand and the franchisor cannot stop them, you lose the exclusivity that the brand is supposed to provide. Second, if the franchisor loses a trademark challenge and must rebrand, you bear the cost of new signage, new marketing materials, new packaging, and the loss of whatever brand recognition you have built in your market.

Third, trademark strength affects the resale value of your franchise. When you eventually sell the franchise, the buyer is paying for the right to continue operating under the brand. If the trademark is weak or subject to challenges, the buyer’s willingness to pay is reduced, which directly affects your exit value. For more on how franchise sales work, see our guide on franchise transfer and sale.

What Is the Difference Between the Principal Register and Supplemental Register?

This distinction is critical and is often overlooked by prospective franchisees. A trademark registered on the Principal Register receives the strongest protection available under U.S. law. This includes a legal presumption of nationwide validity, the exclusive right to use the mark in commerce for the registered goods or services, the right to use the registered trademark symbol, the ability to block imports of infringing goods through U.S. Customs, and after five years, the ability to achieve “incontestable” status, which provides even stronger protection.

A trademark on the Supplemental Register provides significantly weaker protection. The mark does not receive a presumption of validity. The owner cannot claim exclusive nationwide rights. The mark cannot become incontestable. The Supplemental Register is essentially a holding place for marks that are not yet distinctive enough for the Principal Register. If a franchisor’s primary brand name is on the Supplemental Register rather than the Principal Register, it means the USPTO determined the mark was not inherently distinctive, and the franchisor must prove distinctiveness through use over time.

For a franchisee investing hundreds of thousands of dollars in a brand, this distinction matters enormously. A brand on the Supplemental Register is harder to enforce against competitors and provides less certainty that the brand will remain exclusively yours to use in your market.

What Are Superior Rights Claims and How Do They Affect Franchisees?

Under U.S. trademark law, a party that used a mark in a specific geographic area before the franchisor registered the mark federally may have “superior rights” to continue using that mark in that area. This means that even though the franchisor has a federal registration, a local business that was using a similar name first may be legally entitled to continue using it.

For franchisees, superior rights claims create a practical problem: you may not be able to operate under the franchise brand in certain areas because a local competitor has the legal right to use a similar name. Item 13 must disclose any known superior rights claims, but the franchisor may not be aware of every local user. At Lopes Law LLC, we recommend conducting independent trademark searches in your target market to identify potential conflicts before you invest.

A Client Scenario: When Trademark Weakness Changed the Investment Decision

A client came to our firm interested in a health and wellness franchise concept. The franchise fee was $30,000, the total investment was approximately $250,000, and the concept had 45 locations nationwide. The brand name was appealing and the client liked the business model.

When we analyzed Item 13, we found that the franchisor’s primary mark was registered on the Supplemental Register, not the Principal Register. The franchisor had filed for Principal Register registration, but the application had been refused by the USPTO on the grounds that the mark was “merely descriptive” of the services offered. The franchisor was appealing the refusal, but there was no guarantee the appeal would succeed.

We also discovered through our independent search that a competing business in the client’s target market was operating under a nearly identical name and had been doing so for 3 years. Because the competitor had been using the name in the market before the franchisor’s Supplemental Register filing, the competitor likely had superior rights in that area.

The practical implications were significant. The client would invest $250,000 in a brand that was on the weaker Supplemental Register, face a competitor in the same market using a nearly identical name with potential superior rights, and have limited legal recourse because the franchisor’s trademark protection was insufficient to challenge the competitor. Our client decided not to proceed with the investment. The trademark weakness in Item 13 was the deciding factor.

What Should You Look for When Reviewing Item 13?

• Registration status: Are the principal marks on the Principal Register? If they are on the Supplemental Register or pending, understand the implications and the likelihood of achieving Principal Register status.
• Maintenance filings: Has the franchisor filed required Section 8 and Section 15 affidavits? Failure to file these maintenance documents can result in cancellation of the registration.
• Known challenges: Are there any pending opposition or cancellation proceedings against the franchisor’s marks? Any known infringement claims?
• Superior rights disclosures: Does Item 13 disclose any third parties with superior rights? If so, in what geographic areas?
• Online use restrictions: Does the franchise agreement restrict your use of the brand name in domain names, social media handles, or online advertising? These restrictions can significantly affect your local marketing efforts. For more on franchise agreement provisions to watch for, see our guide on franchise agreement red flags.
• Indemnification: Does the franchisor agree to defend and indemnify you if a third party challenges your use of the marks? If not, you may bear the cost of defending your right to use the brand name you are paying to license.

At Lopes Law LLC, our $3,000 flat-fee FDD validation review includes independent verification of trademark registrations through the USPTO, analysis of any pending challenges, and assessment of trademark strength relative to the investment required. For a complete overview of what our review covers, see what to expect from an FDD review.

Frequently Asked Questions About FDD Item 13

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Last updated: March 13, 2026