What happens to the use of the Marks if the License Agreement is terminated for 1 800 Packouts?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
We grant you the right and obligation to use the Marks that we make available to you, for providing products and services at the Franchised Business.
Packout Holdings was assigned the entire interest in of the Marks from Robin Parker on July 2, 2015. The assignment was recorded with the United States Patent and Trademark Office (the "USPTO") on July 16, 2015. All of the Marks are licensed to us pursuant to a License Agreement with Packout Holdings dated as of July 2, 2015 (the "License Agreement"). In the License Agreement, Packout Holdings authorized us to use the Marks in connection with the offer, sale, and support of Franchised Businesses. The License Agreement does not contain any significant limitations on our right to use or license the Marks to you and is perpetual in duration and may be terminated unilaterally by either party only upon a material breach of the License Agreement. Upon termination of the License Agreement, we must immediately discontinue the use of the Marks and assign to Packout Holdings all of our franchise agreements licensing the use of the Marks, and Packout Holdings has agreed to assume all obligations under such agreements arising from and after their assignment.
Source: Item 13 — TRADEMARKS (FDD pages 44–45)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the use of the Marks is impacted if the License Agreement is terminated. Packout Holdings authorized 1 800 Packouts to use the Marks in connection with the offer, sale, and support of Franchised Businesses through a License Agreement. This agreement is perpetual and can only be terminated by either party upon a material breach.
Upon termination of the License Agreement, 1 800 Packouts must immediately discontinue the use of the Marks. Additionally, 1 800 Packouts must assign all franchise agreements licensing the use of the Marks to Packout Holdings. Packout Holdings has agreed to assume all obligations under such agreements arising from and after their assignment.
This means that if the License Agreement between Packout Holdings and 1 800 Packouts is terminated, franchisees would no longer be able to use the 1 800 Packouts Marks. Packout Holdings would then directly manage the franchise agreements and assume the obligations moving forward. This is a significant risk for franchisees, as their business identity is tied to the Marks. Prospective franchisees should carefully consider the stability of the License Agreement between 1 800 Packouts and Packout Holdings.