Under what conditions can the Intercompany License Agreement for Desi District be canceled by the affiliate?
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 that owns the trademarks) and the franchisor grants the franchisor the exclusive right to sublicense the trademarks to franchisees throughout the United States. This agreement is perpetual, meaning it lasts indefinitely unless specific conditions for cancellation are met. The agreement can only be modified if both parties mutually consent to the changes.
The Intercompany License Agreement can be canceled by Desi District, LLC, under two specific conditions. First, if the franchisor materially misuses the trademarks and fails to correct the misuse, the affiliate has grounds for cancellation. Second, if the franchisor discontinues commercial use of the trademarks for a continuous period of more than one year, the affiliate can cancel the agreement.
Importantly, the Intercompany License Agreement specifies that even if it is terminated, a franchisee's rights will remain unaffected. This provides a level of security for franchisees, ensuring that their ability to operate under the Desi District brand is not jeopardized by issues between the franchisor and its affiliate regarding the trademarks.