What is the name of the agreement that grants Chop5 Salad Kitchen the right to use the trademarks?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
On December 19, 2023, we entered into an Intellectual Property License Agreement with CHOP5 IP LLC (the
"License Agreement"). Under the terms of the License Agreement, CHOP5 IP LLC granted us the right to use the Marks in the CHOP5 Salad Kitchen System and sublicense the Marks to our franchisees. The term of the License Agreement automatically renews annually, unless it is terminated in accordance with its terms. CHOP5 IP LLC is permitted to terminate the License Agreement only if we: (a) declare bankruptcy or become insolvent; (b) breach CHOP5 IP LLC's quality control standards and fail to cure the breach within a 60-day cure period; or (c) consent to the termination. If the License Agreement is terminated, it states all sublicenses granted by us to our franchisees will continue in full force and effect until the expiration or termination of the applicable franchise agreement. No other agreements limit our right to use or sublicense use of the Marks.
Source: Item 13 — TRADEMARKS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, the agreement that grants Chop5 Salad Kitchen the right to use the trademarks is called the "Intellectual Property License Agreement." This agreement, established on December 19, 2023, between Chop5 Salad Kitchen and CHOP5 IP LLC, allows Chop5 Salad Kitchen to use the specified marks within the Chop5 Salad Kitchen System and to sublicense these marks to its franchisees.
The License Agreement automatically renews annually unless terminated according to its terms. CHOP5 IP LLC can only terminate the agreement if Chop5 Salad Kitchen declares bankruptcy or becomes insolvent, breaches CHOP5 IP LLC's quality control standards without rectifying the breach within 60 days, or consents to the termination. Importantly, the FDD states that if the License Agreement is terminated, all sublicenses granted to franchisees will remain effective until the individual franchise agreements expire or are terminated.
This arrangement is typical in franchising, where a separate entity often holds the intellectual property and licenses it to the operating company. For a prospective Chop5 Salad Kitchen franchisee, this means their right to use the brand's trademarks is secured through this sublicense, even if the overarching License Agreement between Chop5 Salad Kitchen and CHOP5 IP LLC faces termination under specific conditions. However, franchisees must comply with Chop5 Salad Kitchen's usage rules, including obtaining prior written consent for using the marks in corporate names or with modifications and adhering to authorized product and service offerings.