If Mogavero Investments terminates the license agreement, what obligation do they have to Boulder Designs franchisees?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
Mogavero Investments has granted us a license to use and sublicense to use the above-mentioned Marks, dated December 1, 2017. The term of the license is for 99 years. The license agreement may be terminated if we take any affirmative act of insolvency, if a receiver or trustee is appointed to take possession of our properties and is not discharged within 90 days, if we wind up, sell, consolidate or merge our business, or if we breach any of our duties and obligations under the license and do not cure the breach within 60 days following written notice of the breach. Within the license agreement, the term "Marks" includes any other trade names, service marks, trademarks, designs, logos, slogans and commercial symbols now in existence or later adopted by Mogavero Investments that are used in connection with the System. This license agreement licensed to us any future trademarks acquired by Mogavero Investments as well. If Mogavero Investments terminates the license agreement, they must honor all franchise agreements, including the right to renew.
Source: Item 13 — TRADEMARKS (FDD pages 34–36)
What This Means (2025 FDD)
According to Boulder Designs's 2025 Franchise Disclosure Document, if Mogavero Investments terminates the license agreement with Boulder Designs, Mogavero Investments must honor all existing franchise agreements. This obligation includes honoring the franchisees' right to renew their agreements. The license agreement between Mogavero Investments and Boulder Designs was established on December 1, 2017, and has a term of 99 years.
This provision protects franchisees in the event of a dispute or change in the relationship between Boulder Designs and Mogavero Investments. Even if the license allowing Boulder Designs to use the trademarks is terminated, the franchisees' rights to operate their businesses under the Boulder Designs brand are preserved. This ensures continuity for the franchisee and protects their investment in the franchise.
However, the FDD does not elaborate on the specific procedures or mechanisms by which Mogavero Investments would continue to honor the franchise agreements. A prospective franchisee should seek clarification from Boulder Designs regarding the exact steps that would be taken to ensure a smooth transition and continued support in the event of such a termination. Understanding the details of this process is crucial for assessing the stability and security of the franchise investment.