Item 13 Reality Check: What’s Next for I Heart Mac & Cheese Franchisees?
When a franchise system stops selling new locations, as is the case with Mac and Cheese Franchise Operations, it signals a major shift in priorities; and in the level of future support that current operators can realistically expect. For I Heart Mac & Cheese, the 2023 Franchise Disclosure Document (FDD) Item 13 gives a clear, if uncomfortable, picture of what could happen to the brand’s remaining franchisees if the franchisor shuts down or files for bankruptcy.
What Item 13 Says About Your Rights to the Brand
Item 13 covers trademarks; the name, logos, and other brand identifiers you are licensed to use. Here’s the bottom line from I Heart Mac & Cheese’s most recent FDD:
You don’t own the marks. They’re held by an affiliate, Mac and Cheese Holdings, LLC (the “TM Holder”).
Your right to use the marks flows through a License Agreement between the TM Holder and the franchisor’s parent company, and a Sublicense Agreement between the parent and the franchisor (Mac and Cheese Franchise Operations, LLC, or MCFO).
That means your rights are two steps removed from the actual trademark owner. If either upstream agreement ends (such as with a bankruptcy), your license ends too.
Item 13 contains a critical clause:
“If the License or Sublicense Agreement is terminated, any sublicense agreements thereunder will automatically be terminated.”
In plain English, if the parent company or franchisor loses its license to the brand, for any reason, your right to use the name I Heart Mac & Cheese disappears overnight.
What Happens if the Franchisor Closes or Files Bankruptcy?
Bankruptcy for MCFO is a real possibility according to several credible sources close to MCFO executives. If MCFO stops operations or files for bankruptcy, several scenarios could unfold:
1. The trademark licenses terminate.
Bankruptcy often leads to contract terminations, especially if the upstream license holder decides not to keep licensing the marks to a non-operating franchisor. If that happens:
You must immediately de-identify your store; signage, menus, packaging, online presence, and even uniforms.
All costs for rebranding are yours, not the franchisor’s.
You cannot hold yourself out as an “I Heart Mac & Cheese” location or use any of the marks.
2. The marks are sold to a new owner.
In bankruptcy, intellectual property is an asset that can be sold. If a third party buys the marks:
They may refuse to license them to you.
They may offer a new license, but with different fees, rules, or brand positioning.
They may rebrand or merge the concept into something else entirely.
3. The marks are abandoned.
If no one maintains the trademarks, by using them in commerce and filing required documents with the USPTO, registrations can be canceled. Without federal protection:
You might technically still use the name locally, but without legal exclusivity.
Competitors could use similar names, creating confusion.
Landlords, suppliers, and online platforms might require rebranding to avoid disputes.
Whispers About a Shift in the Brand
Multiple independent sources close to current I Heart Mac & Cheese leadership have told Franchise Reality Check™ that there may be plans to shift ownership of the brand to a new individual and tax entity, leaving Mac and Cheese Franchise Operations, LLC (MCFO) to face bankruptcy on its own.
According to one anonymous source familiar with Max Gonzalez and Delia Valles, this move could mirror tactics seen in other troubled franchise systems; transferring assets or operations to new entities while the old franchisor winds down. This source alleges that funds have already been moved, similar to patterns attributed in the past to CEO Steve Giordanella (Dawley vs. Cabo Flats, et al).
We have not independently verified these claims, but if true, such a shift could leave current operators in a precarious position:
The new brand owner may have no contractual obligation to existing franchisees.
Trademark licenses could be reassigned or withheld.
Bankruptcy of MCFO could still trigger the “automatic termination” language in Item 13, cutting off rights to the marks.
Whether or not these reports prove accurate, they highlight the importance of understanding who truly controls your brand’s trademarks; and what happens to your license if that ownership changes hands.
What This Means for Current Franchisees
If you are one of the few remaining I Heart Mac & Cheese operators, you’re in a system that is no longer growing. That has major implications:
Less incentive for the franchisor to invest in brand marketing, innovation, and quality control.
Greater risk of brand value decline, which could make your business less competitive in your local market.
Increased vulnerability to operational disruption if trademark rights are lost or transferred.
Steps to Protect Your Business Now
Get clarity on the license chain.
Ask MCFO for written confirmation that the License and Sublicense agreements are current and in good standing.
Request written notice if either agreement is at risk of termination.
Monitor the trademarks.
Track all I Heart Mac & Cheese marks on the USPTO database for status changes, maintenance filings, or assignments.
Pay special attention to the 2019 registrations, which are in their maintenance window now.
Plan for a rebrand.
Price out signage, menus, uniforms, and digital asset changes now, before you’re forced into it.
Consider developing a local identity you can transition to if the brand disappears.
Secure supplier relationships.
If the franchisor is providing or controlling your supply chain, explore backup sources in case those contracts dissolve.
Review your franchise agreement’s post-termination obligations.
Understand your de-identification timeline.
Be aware of any non-compete clauses that could limit your ability to pivot.
The Bottom Line
The I Heart Mac & Cheese trademark portfolio is currently active, but your rights to use it are fragile and depend entirely on upstream contracts you can’t control. If MCFO ceases operations or loses its trademark license, your ability to operate under the brand name could be gone within days, with all rebranding costs landing on your shoulders.
In a shrinking system with no new franchise sales, the safest move is to monitor the trademarks, confirm the license chain’s stability, and have a contingency plan ready. The sooner you prepare for life after I Heart Mac & Cheese, the more control you’ll have over your business future.
This article is for educational and informational purposes only and is based on publicly available sources, including the 2023 Franchise Disclosure Document for I Heart Mac & Cheese and records from the United States Patent and Trademark Office. It does not contain, and should not be construed as, legal advice. The scenarios described are hypothetical and provided to help franchisees understand potential business and legal risks in general terms. Franchise agreements and trademark rights vary widely, and outcomes will depend on the specific facts and contractual terms in each case. You should consult with a qualified attorney experienced in franchise and/or trademark law before taking any action or making any decision related to your franchise business.
