Item 13 – Pilar Coffee Bar & Iced Treats’ Trademarks

If you think buying a franchise means you “own” the brand you’re building in your community, Item 13 of the Franchise Disclosure Document (FDD) should be your reality check. This section governs your right to use the franchisor’s trademarks; the name, logo, and brand identity you’ll spend time and money promoting. For Pilar Coffee Bar & Iced Treats franchisees, Item 13 reveals more risk than protection.

What You’re Really Getting

Pilar Coffee Bar & Iced Treats grants you a limited, non-exclusive license to use their designated “Proprietary Marks” but only:

• At your Accepted Location

• In strict compliance with your Franchise Agreement and manuals

That license is not direct. The ownership and licensing chain looks like this:

1. Rush IP Holdings, LLC (“TM Holder”) (Pilar’s affiliate) owns the marks (on paper)

2. TM Holder licenses them to RIT Group, LLC (“Parent”)

3. Parent sublicenses them to the franchisor, Pilar Operations, LLC

4. Pilar sublicenses them to you, the franchisee

Any break in that chain can end your rights instantly.

The Marks Themselves

Pilar lists three marks in Item 13, all filed with the United States Patent and Trademark Office (USPTO) based on “actual use,” but none are federally registered yet:

• PILAR COFFEE BAR & ICED TREATS – Serial No. 98007793

• PILAR plus tagline (“Mountain Origin, Closer to Heaven”) – Serial No. 98021736

• Logo featuring “Coffee Bar & Iced Treats” – Serial No. 98014040

Without a federal registration, these marks don’t carry the same legal protections as registered trademarks. If challenged, you may have to rebrand, and the FDD is clear that those costs will be yours.

What Happens If the Marks Are Challenged

Pilar admits upfront:

“If our right to use these trademarks are challenged, you may have to change to an alternative trademark, which may increase your expenses.”

That means:

• New signage, menus, marketing materials, uniforms; all at your cost

• Potential confusion in your market if you have to reintroduce yourself under a new name

• Lost value in the local goodwill you’ve built for a brand you don’t own

Upstream Dependency: The Double Termination Trap

Your sublicense exists only because of upstream agreements. If either the License Agreement between TM Holder and Parent or the Sublicense Agreement between Parent and Pilar ends, your rights end automatically.

The agreements can be terminated if the Parent or franchisor:

• Becomes insolvent or enters bankruptcy

• Fails to pay amounts due

• Breaches the agreement

• Damages the reputation of the brand

• Challenges the owner’s rights

Here’s the kicker: Item 13 also says if the License Agreement is terminated, “your rights to use the Proprietary Marks will not be materially altered.” That directly conflicts with the “automatic termination” language. Which is it? You’ll want this answered, in writing, before you sign.

Control and Goodwill

Pilar makes it clear:

• All goodwill in the marks belongs exclusively to them

• You get no tangible benefit from that goodwill, except through your own operation or the sale of your store

• You can’t use the marks in your company name, as a “dba,” or alongside other words, designs, or symbols without written consent

• You can’t use the marks with any product or service they haven’t approved

• You can’t challenge their ownership during or after your franchise term

In other words, you will build local recognition for their brand, but you will never own it and you can’t fight to keep it.

Enforcement: Who Controls the Fight

If you discover unauthorized use of the marks:

• You must notify Pilar in writing within three calendar days

• Pilar decides how (or if) to act, controls the litigation, and controls settlement

• They will indemnify you only if the claim comes solely from your authorized use and you’ve followed their instructions

• You must get written approval to hire your own attorney, and even then, they don’t have to reimburse you

Your Obligation to Change

At any time, Pilar can require you to:

• Modify or discontinue using any Proprietary Marks

• Adopt new names, designs, logos, or commercial symbols

• Change signage, trade dress, marketing displays, and advertising

You will have a “reasonable time” to comply, but the cost is 100% yours.

Litigation Status

As of the date of the disclosure:

• No pending litigation over the marks

• No adverse determinations by the USPTO or courts

• No known superior rights or infringing uses that would materially impact your rights

Risks for Franchisees

1. Registration Gap – With only applications filed, not registrations, your legal position is weaker.

2. Upstream Termination Risk – If an affiliate’s agreement ends, you could lose your rights, even if you’re in good standing.

3. Rebranding Costs – Any required name or logo change is on you.

4. Loss of Leverage – You agree never to challenge their rights, even after termination.

5. Ambiguity – The contradiction about “automatic termination” vs. “rights not materially altered” is a legal risk you should address in writing.

Due Diligence Questions to Ask

• Can you provide copies of the License and Sublicense Agreements?

• How would my rights “not be materially altered” if the upstream license ends?

• What is the current USPTO status for each trademark application?

• What’s the contingency plan if any mark is refused or challenged?

• Have you ever required franchisees to rebrand before? If so, how often, and at what cost?

• What naming convention will I be allowed to use for my business entity and leases?

• How does the indemnification process actually work in a real dispute?

• Are there any liens or security interests on the trademarks?

The Bottom Line

Pilar Coffee Bar & Iced Treats’ Item 13 reveals a brand still in the process of securing its most valuable asset: its name. With no federal registrations in place, a stacked license structure that can unravel from the top down, and all rebranding costs shifted to you, the legal protection here leans heavily toward the franchisor.

If you’re considering this franchise, Item 13 should prompt a serious conversation; not just with the franchisor, but with a franchise attorney who can translate “limited license” into what it means for your investment if things go wrong.

Franchise Reality Check™ provides educational content to help prospective and current franchisees understand their Franchise Disclosure Documents and related agreements. This post is not legal advice and should not be relied upon as such. Every franchise system is different, and trademark rights, registrations, and licensing arrangements can change over time. Always have your FDD and franchise agreement reviewed by a qualified franchise attorney before signing or making any investment decisions. The opinions expressed here are based on the information available as of the publication date and may not reflect subsequent updates or developments.