When did the Cilantro Taco Grill license agreement with CTG IP LLC commence?
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 commenced on May 23, 2023. This agreement grants Cilantro Taco Grill broad rights to use the trademarks associated with the Cilantro Taco Grill franchise system and to sublicense these rights to its franchisees. The agreement has a term of 5 years and automatically renews every 5 years.
For a prospective franchisee, this means that Cilantro Taco Grill has secured the rights to use its brand's trademarks for the foreseeable future. The franchisee benefits from this arrangement because Cilantro Taco Grill can sublicense the use of these marks to them, allowing them to operate under the Cilantro Taco Grill brand. The license agreement protects the franchisee's right to use the trademarks, as its termination will not affect the sublicenses granted to franchisees before the termination date.
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. This provides some assurance to franchisees that the trademark rights are stable unless one of these specific events occurs. This type of licensing arrangement is common in franchising, where the franchisor owns or licenses the trademarks and then sublicenses them to franchisees as part of the franchise agreement.
It is important for a prospective franchisee to understand the terms of this license agreement, as it directly affects their ability to use the Cilantro Taco Grill brand and operate their franchise. While the agreement appears to be stable, franchisees should be aware of the conditions under which it could be terminated and how that might affect their business. Additionally, franchisees must comply strictly with the Franchise Agreement to maintain their sublicense to use the marks.