Can the Intercompany License Agreement for Desi District be modified unilaterally?
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 and its affiliate regarding the use of trademarks can only be modified by mutual consent of both parties. This agreement grants Desi District the exclusive right to sublicense trademarks to franchisees throughout the United States and is of perpetual duration.
This means that Desi District cannot unilaterally change the terms of the Intercompany License Agreement. Any modifications require agreement from both Desi District and its affiliate. This provides a level of security for franchisees, as the terms governing the use of the trademarks are not subject to arbitrary changes by Desi District alone.
However, the agreement can be canceled by Desi District's affiliate if Desi District materially misuses the trademarks and fails to correct the misuse, or if Desi District discontinues commercial use of the trademarks for a continuous period of more than one year. Despite the potential for cancellation under these specific circumstances, the Intercompany License Agreement specifies that if it is ever terminated, the franchisee's rights will remain unaffected, which offers further protection to franchisees.