What happens to a Chocolate Fish Coffee franchise if the Intercompany License Agreement is terminated?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Nzus, Corp, our affiliate, owns the trademarks described in this Item. Under an Intercompany License Agreement between us and Nzus, Corp, 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 29–31)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the Intercompany License Agreement between Chocolate Fish Coffee and its affiliate, Nzus, Corp, grants Chocolate Fish Coffee the exclusive right to sublicense trademarks to franchisees in the United States. The agreement remains perpetually in effect unless modified by mutual consent or canceled by Nzus, Corp under specific conditions. These conditions include Chocolate Fish Coffee materially misusing the trademarks without correcting the misuse, or discontinuing commercial use of the trademarks for over a year.
Importantly, the Intercompany License Agreement explicitly states that the termination of the agreement does not affect a franchisee's rights. This provision offers a level of security to franchisees, ensuring their franchise rights remain intact even if the licensing agreement between Chocolate Fish Coffee and its affiliate is terminated.
This protection is a significant benefit for prospective Chocolate Fish Coffee franchisees. It mitigates the risk associated with potential disputes or changes in the relationship between Chocolate Fish Coffee and Nzus, Corp. Franchisees can operate their businesses with the assurance that their right to use the Chocolate Fish Coffee trademarks will not be jeopardized by the termination of the Intercompany License Agreement.