What happens if Cream defaults on any obligations under the License Agreement with Parent regarding the trademarks?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We license the Marks from Parent under a License Agreement dated June 17, 2025 (the "License Agreement"). The term of the License Agreement will continue for 99 years from its effective date 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, by us if Parent breaches its obligations and fails to cure such breach, or by Parent for a number of reasons, including if we default on any obligations, we are dissolved, or if we cease to be under Parent's control. All rights in and goodwill from the use of the Marks accrue to Parent. 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 39–40)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream licenses its trademarks from Parent under a License Agreement dated June 17, 2025. This agreement has a term of 99 years unless terminated earlier. If Cream defaults on its obligations under this License Agreement, Parent has the right to terminate the agreement.
Termination of the License Agreement would result in Cream losing its right to use and sublicense the trademarks to its franchisees. This means that franchisees could potentially lose the right to operate under the Cream brand name and utilize its associated trademarks if Cream fails to meet its obligations to Parent. These obligations could include financial payments, adherence to quality standards, or other contractual requirements specified in the License Agreement.
This arrangement highlights the importance of Cream maintaining a strong relationship with Parent and fulfilling all obligations under the License Agreement to ensure the continued use of the trademarks. For a prospective franchisee, this underscores the need to assess Cream's financial stability and operational practices to minimize the risk of a trademark-related disruption.