Can the License Agreement for Cream's use of the Marks be terminated if Cream defaults on any obligations?
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, the License Agreement, dated June 17, 2025, which allows Cream to use the Marks, can be terminated under certain conditions. The License Agreement has a term of 99 years from its effective date, unless terminated earlier.
Specifically, the License Agreement can be terminated by mutual agreement of the parties involved, or by Cream if Parent breaches its obligations and fails to correct the breach. Critically, Parent can terminate the License Agreement if Cream defaults on any obligations, is dissolved, or ceases to be under Parent's control. If the License Agreement is terminated, Cream would lose the right to use and sublicense the use of the Marks to its franchisees.
This arrangement means that a Cream franchisee's right to use the brand's trademarks is ultimately dependent on Cream's compliance with its obligations to Parent. A franchisee should carefully consider the potential risks associated with this arrangement, as a termination of the License Agreement would have significant implications for their business.