How can the Intercompany License Agreement between Albasha, LLC and the Chocolate Bash franchisor be modified?
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 trademarks used by Chocolate Bash are owned by Albasha, LLC, an affiliate of the franchisor. Chocolate Bash has the exclusive right to sublicense these trademarks to its franchisees through an Intercompany License Agreement with Albasha, LLC. This agreement has a perpetual duration, meaning it is intended to last indefinitely.
The Intercompany License Agreement can only be modified if both Chocolate Bash and Albasha, LLC mutually agree to the changes. This requirement for mutual consent ensures that neither party can unilaterally alter the terms of the agreement. However, Albasha, LLC can cancel the agreement if Chocolate Bash materially misuses the trademarks and fails to correct the misuse, or if Chocolate Bash discontinues commercial use of the trademarks for a continuous period of more than one year.
Importantly, the Intercompany License Agreement specifies that even if it is terminated, the franchise rights of Chocolate Bash franchisees will remain unaffected. This provision offers a level of security to franchisees, ensuring their ability to continue operating under the Chocolate Bash brand even if the licensing agreement between the franchisor and its affiliate is terminated.