Legal Question in Business Law in California

Generally yes, Assuming that the only thing that went wrong was failure to pay the licensing fee, then failure to pay a licensing fee typically means that the licensee no longer has permission to do what it is the merchandising agreement allowed him/her to do.

You should review the licensing agreement for language regarding payment, breach/default, termination, etc.

Like most things in the field of contract, the agreement of the parties determines what it is "legal" to do, or refrain from doing. The contracting parties are free to set their own stage. If the agreement can be interpreted to say, "I may revoke your license if you fail to pay your dues" then it is "legal" to do so. There are limits; for example, the agreement could not say "I may burn down your house if you don't pay your dues" because committing the crime of arson is not something to which a contracting party may agree upon.

As a Franchise Attorney I only add the following. If the license is really a disguised franchise or business opportunity, termination provisions can be subject to overriding statutes that require things like notice and an opportunity to cure. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation