What rights has Albasha, LLC granted to the Chocolate Bash franchisor regarding the trademarks?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
a trademark.
Agreements
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.
Protection of Rights
We protect your right to use the principal trademarks listed in this Item, and we protect you against claims of infringement or unfair competition arising out of your use of the trademarks, to the extent described in this section.
The franchise agreement obligates you to notify us of the use of, or claims of rights to, a trademark identical to or confusingly similar to a trademark licensed to you. The franchise agreement does not require us to take affirmative action when notified of these uses or claims. We have the right to control any administrative proceedings or litigation involving a trademark licensed by us to you.
If you use our trademarks in accordance with the franchise agreement, then (i) we will defend you (at our expense) against any legal action by a third party alleging infringement by your use of the trademark, and (ii) we will indemnify you for expenses and damages if the legal action is resolved unfavorably to you.
Under the franchise agreement, we may require you to modify or discontinue using a trademark, at your expense.
Source: Item 13 — TRADEMARKS (FDD pages 26–28)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, Albasha, LLC, which is an affiliate of the franchisor, owns the trademarks. Under an Intercompany License Agreement between Albasha, LLC and the franchisor, Chocolate Bash has been granted the exclusive right to sublicense the trademarks to franchisees throughout the United States. This agreement has a perpetual duration and can only be modified by mutual consent of both parties. 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. However, the agreement specifies that the termination of the Intercompany License Agreement will not affect the franchisee's rights.
Chocolate Bash is obligated to protect the franchisee's right to use the principal trademarks and defend against claims of infringement or unfair competition arising from the use of the trademarks. Franchisees are required to notify Chocolate Bash of any use of, or claims to, a trademark that is identical or confusingly similar to the licensed trademark. While Chocolate Bash is not obligated to take action upon notification, they retain the right to control any administrative proceedings or litigation involving the licensed trademark.
If a franchisee uses Chocolate Bash's trademarks in accordance with the franchise agreement, Chocolate Bash will defend the franchisee against any legal action by a third party alleging infringement and will indemnify the franchisee for expenses and damages if the legal action is resolved unfavorably. However, Chocolate Bash retains the right to require a franchisee to modify or discontinue using a trademark, at the franchisee's expense. This could potentially lead to additional costs for the franchisee if rebranding or changes are necessary.