If the assignment of Improvement rights to Amorino is invalid, what license does the franchisee grant to Amorino?

According to Amorino's 2025 Franchise Disclosure Document, if the assignment of improvement rights is deemed invalid or unenforceable, the franchisee grants Amorino a specific license. This license is worldwide, perpetual, non-exclusive, and fully paid, allowing Amorino to use and sublicense the use of the improvement. This provision ensures that even if the assignment of rights is not legally sound, Amorino retains the ability to utilize any improvements developed by the franchisee without infringing on the franchisee's rights.

This license is limited to the extent that use or sublicense would, absent the agreement, directly or indirectly infringe on the franchisee's or their principals' rights. In practical terms, this means Amorino can use the franchisee's improvements for the entire duration of the agreement and can allow others to use them as well. However, this is only applicable if using the improvement would otherwise violate the franchisee's rights.

For a prospective franchisee, this clause highlights the importance of understanding intellectual property rights and the potential for innovations to be utilized by the franchisor. While the license is non-exclusive, meaning the franchisee can still use their own improvements, the franchisor has the right to sublicense it to others, potentially impacting the franchisee's competitive advantage. It is important for franchisees to seek legal counsel to fully understand the implications of this clause and how it may affect their business operations and intellectual property rights.