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On October 13, 2023, the headquarters of Starbucks Corp. in Seattle, in the United States, sent a document to the trademark’s operator in Brazil that was decisive for the Brazilian company’s request for judicial recovery submitted to the Court on Tuesday (31).

The most famous coffee shop in the world delivered, on that date, the “Notice of Termination of Licensing Agreements.”

Without receiving royalties for using the trademark in Brazil, the multinational announced the termination of the contract that allowed SouthRock Capital to explore the Starbucks brand in Brazil. The end of the agreement took effect immediately.

Two contracts were suspended. One licensing the trademark in Brazil, and another granted SouthRock Capital the right to be the master Starbucks licensee in the country – that is, the operator of the stores. The information is contained in the documentation submitted by SouthRock in the request for judicial recovery.

This decision by headquarters accelerated the urgency of the request for judicial recovery.

SouthRock’s lawyers argue that these contracts “are essential to maintaining the applicants’ activities and, consequently, enabling the restructuring of their liabilities.”

“The exploration and operation of Starbucks stores/cafeterias on the national scene – not only is it essential to the activities of the applicants as already mentioned, but it also consists of one of their greatest assets,” they mention in the document delivered to the São Paulo Court.

The company also argues that SouthRock had adopted, before the end of the contract, “operational and financial measures aimed at restructuring its operations to equalize its economic situation.” And that the Brazilian company was negotiating with the multinational to try to renegotiate the contracts, including some additions already signed.

The objective was that “payment conditions reflect your current financial capacity.”

Currently, the gross revenue of the Starbucks trademark in Brazil exceeds U$10 million per month.

To CNN, SouthRock said it “continues to operate the Starbucks trademark in Brazil” and is “committed to working closely with its commercial partners to develop the trademarks in its portfolio in Brazil.” In a note to CNN, the company says that “alignments on licenses are part of the judicial recovery process and are carried out directly with these partners.”

In the request for judicial recovery, however, the company says that “the notification of termination (of licensing) was received by the applicants with absolute surprise since the relationship and negotiations maintained between the parties until then had never indicated that there would be the possibility of immediate termination of the Starbucks License Agreements.”

Source: CNN