What is the duration of the license agreement between Cilantro Taco Grill and CTG IP LLC?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Our license agreement with CTG IP LLC ("Licensor") gives us broad rights to use the Marks in connection with the operation of the Cilantro Taco Grill franchise System, and to sublicense to franchisees the right to use the Marks, in strict accordance with our Franchise Agreement. The term of our license agreement is for 5 years, commencing May 23, 2023, and will automatically renew every 5 years. The license agreement will terminate only upon (i) our bankruptcy or (ii) our election to terminate by providing 180 days' prior notice to the Licensor. A termination of the license agreement will have no effect on sublicenses granted to franchisees prior to the date of termination.
Source: Item 13 — TRADEMARKS (FDD pages 35–36)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the license agreement between Cilantro Taco Grill and CTG IP LLC has an initial term of 5 years, commencing on May 23, 2023. After the initial term, the agreement automatically renews for additional 5-year periods.
This agreement outlines the terms under which Cilantro Taco Grill is allowed to use the trademarks associated with the franchise system. The license agreement can only be terminated if Cilantro Taco Grill declares bankruptcy or elects to terminate the agreement by providing 180 days' prior notice to CTG IP LLC.
Importantly, the FDD states that the termination of the license agreement between Cilantro Taco Grill and CTG IP LLC will not affect the sublicenses granted to franchisees before the termination date. This provides some assurance to franchisees that their right to use the Cilantro Taco Grill trademarks will continue even if the overarching license agreement is terminated.