Under what conditions can Lees Famous Recipe's Parent terminate the Trademark License Agreement?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
The Marks are owned by our Parent, which has granted us a license to use and license franchisees to use the marks effective June 21, 2021 (the "Trademark License Agreement"). The Trademark License Agreement is effective indefinitely unless terminated at the option of either party. Our Parent may terminate the Trademark License Agreement if our misuse of the Marks materially impairs the goodwill associated with the Marks, if we violate any of our Parent's instructions concerning the quality of the Marks, or if we fail to perform any other obligation under the Trademark License Agreement, and we fail to cure such breach within 30 days. If the Trademark License Agreement terminates, any then-existing sublicenses (franchises) will automatically be assigned to our Parent and will continue for the term of the sublicenses, provided that the franchisees comply with all other terms of their Franchise Agreements. The Trademark License Agreement contains no other material limitations.
Source: Item 13 — TRADEMARKS (FDD pages 50–52)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, the Marks are owned by their Parent, which has granted Lees Famous Recipe a license to use and sublicense the marks to franchisees, effective June 21, 2021, through a Trademark License Agreement. This agreement remains effective indefinitely but can be terminated at the option of either party, Lees Famous Recipe or its Parent.
Lees Famous Recipe's Parent can terminate the Trademark License Agreement under specific conditions. These conditions include if Lees Famous Recipe's misuse of the Marks materially impairs the goodwill associated with the Marks, if Lees Famous Recipe violates any of the Parent's instructions concerning the quality of the Marks, or if Lees Famous Recipe fails to perform any other obligation under the Trademark License Agreement.
However, Lees Famous Recipe has an opportunity to cure the breach within 30 days. If Lees Famous Recipe fails to cure the breach within this period, the Parent can proceed with the termination. If the Trademark License Agreement is terminated, any existing sublicenses (franchises) will automatically be assigned to Lees Famous Recipe's Parent. These franchises will continue for the term of the sublicenses, provided that the franchisees comply with all other terms of their Franchise Agreements.