Who is the licensor in the Intercompany License Agreement for Chocolate Fish Coffee trademarks?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the trademarks are owned by Nzus, Corp, an affiliate of Chocolate Fish Coffee. Chocolate Fish Coffee has been granted the exclusive right to sublicense these trademarks to franchisees throughout the United States through an Intercompany License Agreement with Nzus, Corp. This agreement is perpetual and can only be modified with the mutual consent of both parties. Nzus, Corp can cancel the agreement 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.

This arrangement is common in franchising, where a parent company or affiliate owns the intellectual property and licenses it to the franchising entity. This structure provides a layer of legal separation and can help protect the trademarks. The Intercompany License Agreement ensures that Chocolate Fish Coffee franchisees have the right to use the trademarks. The agreement also specifies that even if the Intercompany License Agreement is terminated, the franchisee's rights will remain unaffected, providing some security for franchisees.

Prospective Chocolate Fish Coffee franchisees should understand the terms of the Intercompany License Agreement, even though they are not direct parties to it. It is important to note that the franchise agreement obligates franchisees to notify Chocolate Fish Coffee of any identical or confusingly similar trademark uses or claims. While Chocolate Fish Coffee is not required to take action upon notification, they do have the right to control any administrative proceedings or litigation involving the licensed trademarks. This means that Chocolate Fish Coffee ultimately decides how to respond to any potential trademark issues, which could impact a franchisee's business.

Chocolate Fish Coffee also commits to defending franchisees against legal actions alleging trademark infringement and will indemnify them for expenses and damages if the legal action is resolved unfavorably, provided the trademarks are used in accordance with the franchise agreement. However, Chocolate Fish Coffee may require franchisees to modify or discontinue using a trademark at the franchisee's expense under the franchise agreement. This highlights the importance of adhering to Chocolate Fish Coffee's trademark usage guidelines and staying informed about any changes or updates to these guidelines.