What is Buns On Fire required to do if the License Agreement is terminated?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
We license the right to use Proprietary Marks from SMYA Ventures LLC ("Licensor"). All of the Marks are licensed to us pursuant to a License Agreement with Licensor (the "License Agreement"). In the License Agreement, Licensor authorizes us to use the Marks in connection with the offer, sale, and support of Franchise Businesses. The License Agreement does not contain any significant limitations on our right to use or license the Marks to you and may be terminated unilaterally by either party upon a material breach of the License Agreement. Upon termination of the License Agreement, we must immediately discontinue the use of the Marks, and no arrangement regarding the assignment of all of our franchise agreements licensing the use of the Marks to Licensor and Licensor's assumption of all obligations under such agreements arising from and after their assignment is contained in the License Agreement.
Source: Item 13 — TRADEMARKS (FDD pages 35–37)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, the License Agreement between Buns On Fire and its licensor, SMYA Ventures LLC, dictates the actions Buns On Fire must take if the License Agreement is terminated. Specifically, Buns On Fire must immediately discontinue the use of the Marks. The FDD clarifies that the License Agreement does not include any arrangement for the assignment of franchise agreements to the Licensor or the Licensor's assumption of obligations under those agreements after assignment.
This means that if the License Agreement is terminated, franchisees would no longer be able to operate under the Buns On Fire brand name or use its trademarks. This could have a significant impact on the franchisee's business, as brand recognition and trademark usage are crucial for attracting and retaining customers. The absence of an arrangement for assignment of franchise agreements to the Licensor means that in the event of termination, Buns On Fire franchisees do not have a guaranteed option to continue operating under the brand with the Licensor directly.
Prospective franchisees should be aware of this potential risk and carefully consider the stability of the License Agreement between Buns On Fire and its Licensor. It would be prudent to inquire about the specific circumstances under which the License Agreement could be terminated and what protections, if any, Buns On Fire would offer to its franchisees in such a scenario. Understanding the terms of the License Agreement and the relationship between Buns On Fire and its Licensor is an important part of assessing the overall risk of investing in a Buns On Fire franchise.