Under what conditions can the Intercompany License Agreement for Chocolate Fish Coffee be canceled by the affiliate?
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. This agreement is perpetual and can only be modified with the mutual consent of both parties.
However, Nzus, Corp, as the affiliate, can cancel the Intercompany License Agreement under specific conditions. These conditions are if Chocolate Fish Coffee (1) materially misuses the trademarks and fails to correct the misuse, or (2) discontinues commercial use of the trademarks for a continuous period of more than one year.
Importantly, the Intercompany License Agreement specifies that even if it is terminated, a franchisee's rights will remain unaffected. This provides a level of security for franchisees, ensuring their ability to continue operating under the Chocolate Fish Coffee brand even if the agreement between the company and its affiliate is canceled.