What is the deadline for ACS to send Anago a notice of non-renewal of the License Agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
ACS owns the Proprietary Marks. Under a license agreement dated June 1, 2012 (the "License Agreement"), ACS granted us a license to use the Proprietary Marks and to sublicense the Proprietary Marks to Subfranchisors throughout the United States and internationally under a Subfranchise Rights Agreement. The License Agreement is for an initial term of 10 years and renews automatically for successive one-year renewal periods. We have the right to renew the License Agreement if we are not in default. ACS has the right to terminate the License Agreement if we commit a default and do not cure the default within the specified time period or if ACS sends us notice of non-renewal 45 days before the expiration of the current term. If the License Agreement is terminated, and ACS does not elect to assume our rights under the Subfranchise Rights Agreement, you will not be permitted to use the Proprietary Marks in the operation of your business and your Subfranchise Rights Agreement may be terminated. There are no other agreements currently in effect that significantly limit our rights to use or license the use of the Proprietary Marks in any manner material to you or your franchisees.
Source: Item 13 — TRADEMARKS (FDD pages 38–41)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, ACS (the owner of the Proprietary Marks) must notify Anago of non-renewal of their License Agreement 45 days before the expiration of the current term. The License Agreement, dated June 1, 2012, grants Anago the right to use and sublicense the Proprietary Marks. The initial term was for 10 years, with automatic one-year renewals thereafter.
This means that if ACS wishes to prevent the License Agreement from automatically renewing for another year, they must provide Anago with written notice at least 45 days prior to the end of the current one-year term. If ACS terminates the License Agreement and does not assume Anago's rights under the Subfranchise Rights Agreement, Anago subfranchisees will not be allowed to use the Proprietary Marks, and their Subfranchise Rights Agreement may be terminated.
For a prospective Anago subfranchisee, this highlights the importance of the License Agreement between ACS and Anago. The subfranchisee's rights to use the Anago trademarks are dependent on this agreement remaining in effect. If the License Agreement is terminated, the subfranchisee's business could be significantly impacted, potentially leading to termination of their subfranchise agreement.
Therefore, it is crucial for potential subfranchisees to understand the terms of the License Agreement and the potential consequences of its termination. They should inquire about the relationship between Anago and ACS, the likelihood of non-renewal, and the steps Anago would take to protect its subfranchisees in the event of a termination. This information can help them assess the stability and long-term viability of their investment in an Anago subfranchise.