Can the Intercompany License Agreement for Chocolate Fish Coffee be modified unilaterally?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the Intercompany License Agreement between Chocolate Fish Coffee and its affiliate, Nzus, Corp, which grants Chocolate Fish Coffee the exclusive right to sublicense trademarks to franchisees, cannot be modified unilaterally. The document specifies that the agreement may be modified only by mutual consent of both parties, meaning both Chocolate Fish Coffee and Nzus, Corp must agree to any changes. This agreement is of perpetual duration.

This arrangement protects franchisees because it ensures that the terms under which Chocolate Fish Coffee can use and sublicense the trademarks are stable and cannot be altered without the consent of both Chocolate Fish Coffee and its affiliate. This reduces the risk that Chocolate Fish Coffee could unilaterally change the terms of the trademark usage, which could negatively impact franchisees. The agreement can only 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.

Furthermore, the Intercompany License Agreement includes a provision that even if the agreement is terminated, the franchise rights of Chocolate Fish Coffee franchisees will remain unaffected. This provides an additional layer of security for franchisees, ensuring that their right to use the trademarks will continue even if the licensing agreement between Chocolate Fish Coffee and its affiliate is terminated. This protection is a significant benefit for franchisees, as it mitigates the risk associated with changes in the relationship between the franchisor and its affiliate trademark owner.