What happens to a Chocolate Bash franchisee's rights if the Intercompany License Agreement is terminated?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
Albasha, LLC, our affiliate, owns the trademarks described in this Item. Under an Intercompany License Agreement between us and Albasha, LLC, we have been granted the exclusive right to sublicense the trademarks to franchisees throughout the United States. The agreement is of perpetual duration. It may be modified only by mutual consent of the parties. It may be canceled by our affiliate only if (1) we materially misuse the trademarks and fail to correct the misuse, or (2) we discontinue commercial use of the trademarks for a continuous period of more than one year. The Intercompany License Agreement specifies that if it is ever terminated, your franchise rights will remain unaffected.
Source: Item 13 — TRADEMARKS (FDD pages 26–28)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the termination of the Intercompany License Agreement between Chocolate Bash and its affiliate, Albasha, LLC, will not affect a franchisee's rights. This agreement grants Chocolate Bash the exclusive right to sublicense trademarks to franchisees throughout the United States.
This Intercompany License Agreement is of perpetual duration and can only be modified by mutual consent. Albasha, LLC can only cancel the agreement if Chocolate Bash materially misuses the trademarks without correcting the misuse, or if Chocolate Bash discontinues commercial use of the trademarks for over a year. The FDD explicitly states that even if this agreement is terminated, the franchisee's rights remain unaffected, providing a level of security for the franchisee's investment and operation.
This protection is significant for prospective Chocolate Bash franchisees. It assures them that their right to use the Chocolate Bash trademarks, which are critical for operating the franchise, will not be jeopardized if the licensing agreement between Chocolate Bash and its affiliate is terminated. This clause mitigates a potential risk factor, making the franchise opportunity more stable and predictable.