From whom are Card My Yard's rights to the Marks and the proprietary Business System know-how derived?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
Our rights to the Marks and the proprietary Business System know-how are derived from a nonexclusive perpetual license (the "Intercompany License") between us and our affiliate, CMY Holdco, LLC (successor-ininterest to Card My Yard, LLC). The Intercompany License grants us the right to use the Marks and the proprietary information related to the Business System, such as the know-how and the Manuals, for the purpose of licensing them to our franchisees and fulfilling our obligations under the Franchise Agreement. The Intercompany License is terminable only for material breach of the Intercompany License agreement and only if we do not cure or begin to cure the breach within 90 days after notice. If the Intercompany License agreement is terminated by us or CMY Holdco, LLC then CMY Holdco, LLC will permit you to continue using the Marks under your franchise agreement until the expiration or earlier termination of such franchise agreement (plus one renewal period if the agreement is set to expire and you meet all renewal criteria set forth in your Franchise Agreement). We know of no other agreements currently in effect which significantly limit our rights to use or license the use of the Marks in any manner material to you.
Source: Item 13 — TRADEMARKS (FDD pages 46–48)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, the rights to the Marks and the proprietary Business System know-how are derived from a nonexclusive perpetual license (the "Intercompany License") between Card My Yard and its affiliate, CMY Holdco, LLC, which is the successor-in-interest to Card My Yard, LLC. This Intercompany License grants Card My Yard the right to use the Marks and proprietary information related to the Business System, including know-how and manuals, for the purpose of licensing them to its franchisees and fulfilling obligations under the Franchise Agreement.
This arrangement means that Card My Yard does not directly own the trademarks and proprietary systems but licenses them from its affiliate, CMY Holdco, LLC. The license is perpetual and nonexclusive, indicating that CMY Holdco, LLC may have the right to license the Marks to other parties as well, although the FDD states that there are no other agreements that significantly limit Card My Yard's rights to use or license the Marks. The Intercompany License can only be terminated for material breach of the agreement, and even then, Card My Yard has 90 days to cure the breach after notice.
In the event that the Intercompany License agreement is terminated by either Card My Yard or CMY Holdco, LLC, CMY Holdco, LLC will allow franchisees to continue using the Marks under their franchise agreement until the agreement expires or is terminated, including one renewal period if the franchisee meets all renewal criteria. This provides some security for franchisees, ensuring they can continue operating under the Card My Yard brand even if the licensing agreement between the company and its affiliate is terminated. Prospective franchisees should consider the implications of this structure and the potential impact of a termination of the Intercompany License, despite the protections in place.