What happens if Clean Your Dirty Face defaults on its obligations to the Trademark Owner?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
We license the Marks from Krishna IP ("Trademark Owner"), who owns all rights to the Marks, pursuant to a Trademark License Agreement (the "License Agreement"). The term of the License Agreement began on March 30, 2022 and will continue for 99 years unless terminated. The License Agreement may be terminated (resulting in the loss of our right to use and to sublicense the use of the Marks to you) by mutual agreement of the parties, or by Trademark Owner for a number of reasons, including if we default on any obligations, we are dissolved, make an assignment for the benefit of creditors, become insolvent, consent to appointment of a receiver, or our business is seized. All rights in and goodwill from the use of the Marks accrue to Trademark Owner. Except as described above, no agreement significantly limits our rights to use or sublicense the Marks in a manner material to the franchise.
Source: Item 13 — TRADEMARKS (FDD pages 40–42)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, Clean Your Dirty Face licenses its trademarks from Krishna IP, the Trademark Owner, through a Trademark License Agreement. This agreement, which began on March 30, 2022, has a term of 99 years unless terminated earlier. The License Agreement outlines specific conditions under which it can be terminated, which would then result in Clean Your Dirty Face losing the right to use and sublicense the trademarks to its franchisees.
One of the key reasons for termination of the License Agreement is if Clean Your Dirty Face defaults on any of its obligations to the Trademark Owner. Other reasons include Clean Your Dirty Face's dissolution, assignment for the benefit of creditors, insolvency, consent to the appointment of a receiver, or seizure of its business. Any of these events could lead to the Trademark Owner terminating the agreement.
For a prospective Clean Your Dirty Face franchisee, this means that the right to use the Clean Your Dirty Face trademarks is contingent on Clean Your Dirty Face maintaining its obligations to the Trademark Owner. If Clean Your Dirty Face fails to meet these obligations, franchisees could lose the right to operate under the Clean Your Dirty Face brand, which would significantly impact their business. It is important for potential franchisees to understand the terms of the License Agreement and the potential risks associated with its termination.