Under what conditions can the Intercompany License Agreement be canceled by Desi District, LLC?
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 trademarks to franchisees throughout the United States. This agreement has a perpetual duration and can only be modified with the mutual consent of both parties.
However, Desi District, LLC, as the affiliate, can cancel the Intercompany License Agreement under specific conditions. These conditions are: (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.
Importantly, the Intercompany License Agreement specifies that even if it is terminated, a franchisee's franchise rights will remain unaffected. This provides a level of security for franchisees, ensuring their right to operate under the Desi District brand is protected even if the licensing agreement between the franchisor and its affiliate is canceled.