Under what conditions can Sunmarks terminate the license to use the Aplus marks?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Through a master license agreement dated June 1, 1990, Sunmarks granted us a license to use the Marks and to sublicense their use to our franchisees. The license is perpetual unless terminated for cause by either party. In the event of termination by Sunmarks, you will have to change, at your expense, to the alternative Marks we designate.
Source: Item 13 — TRADEMARKS (FDD pages 47–50)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Sunmarks, the owner of the Aplus trademarks, has the right to terminate the license granted to Aplus to use these marks. This right is tied to a master license agreement dated June 1, 1990, between Sunmarks and Aplus. The license is perpetual but can be terminated by either party if there is cause.
If Sunmarks terminates the license for cause, Aplus franchisees will be required to switch to alternative marks designated by Aplus. This change must be made at the franchisee's own expense. This means franchisees would bear the costs of updating signage, marketing materials, and any other items bearing the Aplus trademarks.
This condition highlights the importance of Aplus maintaining a good relationship with Sunmarks and adhering to the terms of their agreement. Any actions by Aplus that give Sunmarks cause to terminate the master license agreement could have significant financial implications for Aplus franchisees, as they would be forced to rebrand at their own expense. Prospective franchisees should carefully review the terms of the Franchise Agreement and understand what actions could potentially lead to a termination of the trademark license.