What is the consequence if an All Team franchisee fails to disclose innovations related to the agency?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
All ideas, concepts, techniques, innovations, developments, improvements, suggestions or materials concerning the Agency, whether or not protectable intellectual property and whether created by or for FRANCHISEE or its owners, affiliates, employees or representatives, must be promptly disclosed to ATFC and will be deemed to be ATFC's sole and exclusive property, part of the System and works made-for-hire for ATFC.
To the extent any such item does not qualify as a "work madefor-hire" for ATFC, FRANCHISEE must assign, or must require its owners, affiliates, employees or representatives to assign, its or their ownership interest of such item to ATFC.
FRANCHISEE agree to take, or direct FRANCHISEE's owners, affiliates, employees or representatives to take, whatever action required by ATFC to document such assignment or to assist ATFC in obtaining any and all intellectual property rights in such item.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, franchisees are required to promptly disclose all ideas, concepts, techniques, innovations, developments, improvements, suggestions, or materials concerning the agency to All Team. This includes anything created by or for the franchisee, their owners, affiliates, employees, or representatives, regardless of whether it's protectable intellectual property. These innovations are deemed the sole and exclusive property of All Team and considered works made-for-hire.
If an item doesn't qualify as a work-made-for-hire, the franchisee must assign their ownership interest (or ensure that their owners, affiliates, employees, or representatives assign their ownership) to All Team. The franchisee must also take any action required by All Team to document the assignment or assist All Team in obtaining intellectual property rights.
While the FDD excerpt specifies the franchisee's obligation to disclose and assign innovations, it does not explicitly state the consequences of failing to do so. However, failure to comply with the terms of the franchise agreement, including the mandatory requirements, can be grounds for termination of the agreement. A prospective franchisee should seek clarification from All Team regarding the specific repercussions of not disclosing innovations, as this could have significant implications for their operation and ownership of any advancements they develop within the agency.