Under what conditions can the License Agreement be terminated, resulting in Cream losing the right to use and sublicense the Marks?
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 its Parent company under a License Agreement dated June 17, 2025. This agreement has a term of 99 years, but can be terminated under certain conditions, which would result in Cream losing the right to use and sublicense the trademarks to its franchisees.
The License Agreement can be terminated by mutual agreement between Cream and its Parent company. Cream can also terminate the agreement if the Parent company breaches its obligations and fails to correct the breach. The Parent company can terminate the License Agreement if Cream defaults on any obligations, is dissolved, or ceases to be under the Parent company's control.
This is a critical point for prospective Cream franchisees to understand. If the License Agreement is terminated, Cream would no longer have the right to use or sublicense the trademarks, which are essential to the operation of a Cream franchise. This could have a significant impact on the franchisee's business, potentially leading to a loss of brand recognition and customer goodwill. Franchisees should carefully consider these potential risks and seek clarification from Cream regarding the stability and security of the License Agreement before investing in a franchise.