What happens if an All States M.E.D. franchisee's employees create ideas, concepts, techniques or materials concerning the franchised business?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
7.2 Additional Developments
All ideas, concepts, techniques or materials concerning the System or developed, in whole or in part, using Trade Secrets or other Confidential Information, whether or not protectable intellectual property and whether created by or for Franchisee or its owners or employees, shall be promptly disclosed to Franchisor and shall be deemed the sole and exclusive property of Franchisor and works made-for-hire for Franchisor, and no compensation shall be due to Franchisee or its owners or employees therefore, and Franchisee hereby agrees to assign to Franchisor all right, title and interest in any intellectual property so developed. Franchisor has the right to incorporate such items into the System. To the extent any item does not qualify as a "work made-for-hire" for Franchisor, Franchisee shall assign, and by this Agreement, does assign, ownership of that item, and all related rights to that item, to Franchisor and shall sign any assignment or other document as Franchisor requests to assist Franchisor in obtaining or preserving intellectual property rights in the item. Franchisor shall disclose to Franchisee concepts and developments of other franchisees that are made part of the System. As Franchisor may reasonably request, Franchisee shall take all actions to assist Franchisor's efforts to obtain or maintain intellectual property rights in any item or process related to the System, whether developed by Franchisee or not.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 30–31)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, any ideas, concepts, techniques, or materials related to the All States M.E.D. system that are developed using trade secrets or confidential information, regardless of whether they are created by the franchisee, their owners, or employees, must be promptly disclosed to All States M.E.D. Franchising, LLC. These creations are deemed the sole and exclusive property of All States M.E.D. and are considered works made for hire for the company.
The All States M.E.D. franchisee or their personnel will not be entitled to any compensation for these developments. The franchisee agrees to assign all rights, titles, and interests in any intellectual property developed to All States M.E.D. Franchising, LLC. This includes signing any necessary documents to assist All States M.E.D. in securing or protecting intellectual property rights. All States M.E.D. Franchising, LLC has the right to incorporate these items into the All States M.E.D. system.
All States M.E.D. Franchising, LLC will disclose to the franchisee concepts and developments from other franchisees that are incorporated into the system. The franchisee is required to assist All States M.E.D.'s efforts to obtain or maintain intellectual property rights related to the system, regardless of who developed the item or process. This clause ensures that All States M.E.D. retains control over any improvements or innovations to its system, even those originating from franchisees or their staff, which is a common practice in franchising to maintain brand consistency and protect intellectual property.