How can the Intercompany License Agreement be modified for Chocolate Fish Coffee?
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 trademarks used by franchisees are owned by Nzus, Corp, an affiliate of the franchisor. Chocolate Fish Coffee has the exclusive right to sublicense these trademarks to franchisees through an Intercompany License Agreement with Nzus, Corp. This agreement has a perpetual duration, meaning it is intended to last indefinitely.
However, the Intercompany License Agreement can be modified, but only through the mutual consent of both Chocolate Fish Coffee and Nzus, Corp. This requirement for mutual consent means that both parties must agree to any changes made to the agreement. This protects both Chocolate Fish Coffee and Nzus, Corp from unilateral changes that could negatively impact their respective rights and obligations.
The agreement can be canceled by Nzus, Corp if Chocolate Fish Coffee materially misuses the trademarks and fails to correct the misuse, or if Chocolate Fish Coffee discontinues commercial use of the trademarks for a continuous period of more than one year. Importantly, the Intercompany License Agreement specifies that if it is ever terminated, the franchisee's rights will remain unaffected. This provides a level of security for franchisees, ensuring that their right to use the trademarks will continue even if the agreement between Chocolate Fish Coffee and its affiliate is terminated.