Under what conditions can the Intercompany License Agreement for Chocolate Bash be canceled by Albasha, LLC?
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 Intercompany License Agreement between Chocolate Bash and its affiliate, Albasha, LLC, which owns the trademarks, can be canceled by Albasha, LLC under specific conditions. Albasha, LLC has granted Chocolate Bash the exclusive right to sublicense the trademarks to franchisees throughout the United States through this agreement. The agreement is perpetual, meaning it lasts indefinitely, and can only be modified if both parties agree.
However, Albasha, LLC can cancel the Intercompany License Agreement under two circumstances: first, if Chocolate Bash materially misuses the trademarks and fails to correct the misuse; second, if Chocolate Bash discontinues commercial use of the trademarks for a continuous period of more than one year.
Importantly, the FDD states that even if the Intercompany License Agreement is terminated, a franchisee's rights will remain unaffected. This provides a level of security for franchisees, ensuring their ability to operate under the Chocolate Bash brand even if the agreement between Chocolate Bash and Albasha, LLC is canceled.