How can the Intercompany License Agreement be modified for Desi District?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
Desi District, LLC, our affiliate, owns the trademarks described in this Item. Under an Intercompany License Agreement between us and Desi District, LLC, we have been granted the exclusive right to sublicense the trademarks to franchisees throughout the United States. The agreement is of perpetual duration. It may be modified only by mutual consent of the parties. It may be canceled by our affiliate only if (1) we materially misuse the trademarks and fail to correct the misuse, or (2) we discontinue commercial use of the trademarks for a continuous period of more than one year. The Intercompany License Agreement specifies that if it is ever terminated, your franchise rights will remain unaffected.
Source: Item 13 — TRADEMARKS (FDD pages 40–42)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the Intercompany License Agreement between Desi District, LLC (the affiliate owning the trademarks) and the franchisor outlines the terms for sublicensing trademarks to franchisees. This agreement has a perpetual duration, meaning it is intended to last indefinitely.
The FDD specifies that the Intercompany License Agreement can only be modified through mutual consent of both parties involved: Desi District, LLC, and the franchisor. This requirement for mutual consent ensures that any changes to the agreement are agreed upon by both parties, protecting the interests of both.
Furthermore, the agreement can be canceled by Desi District, LLC, under specific conditions: (1) if the franchisor materially misuses the trademarks and fails to correct the misuse, or (2) if the franchisor discontinues commercial use of the trademarks for a continuous period of more than one year. However, the Intercompany License Agreement also states that if it is ever terminated, the franchisee's rights will remain unaffected, providing a level of security for franchisees. This means that even if the agreement between the franchisor and its affiliate is terminated, the franchisee's right to use the trademarks, as granted in the franchise agreement, will continue.