What representation does an Anago franchisee make regarding their employees' and contractors' agreements concerning system improvements?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
All improvements, developments, derivative works, enhancements, or modifications to any Confidential Information (collectively, "Innovations") made or created by Subfranchisor, its employees, contractors or Unit Franchisees, whether developed separately or in conjunction with Franchisor, shall be owned solely by Franchisor.
Subfranchisor represents, warrants, and covenants that its employees, contractors and Unit Franchisees are bound by written agreements assigning all rights in and to any Innovations developed or created by them to Subfranchisor.
To the extent that Subfranchisor, its employees, contractors or Unit Franchisees are deemed to have any interest in such Innovations, Subfranchisor hereby agrees to assign, and does assign, all right, title and interest in and to such Innovations to Franchisor.
To that end, Subfranchisorshall execute, verify, and deliver such documents (including, without limitation, assignments) and perform such other acts (including appearances as a witness) as Franchisor may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining, and enforcing such ownership rights in and to the Innovations, and the assignment thereof.
Subfranchisor's obligation to assist Franchisor with respect to such ownership rights shall continue beyond the expiration or termination of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to the 2025 Anago FDD, a subfranchisor must ensure that their employees, contractors, and unit franchisees have written agreements in place that assign all rights to any innovations they develop or create to the subfranchisor. These innovations refer to improvements, developments, derivative works, enhancements, or modifications to any confidential information related to Anago's system. This agreement ensures that Anago retains ownership of any advancements or changes made to its system, even if those changes are conceived or implemented by individuals working for the subfranchisor.
This requirement protects Anago's intellectual property and ensures consistency across all franchise operations. It prevents franchisees or their staff from independently developing and implementing changes to the Anago system that could potentially undermine the brand's standards or create inconsistencies in service delivery. The subfranchisor's obligation extends beyond the term of the agreement, requiring them to assist Anago in securing and enforcing these ownership rights.
In practical terms, a prospective Anago subfranchisor must implement a legally sound agreement with all employees, contractors, and unit franchisees. This agreement must clearly state that any innovations related to Anago's confidential information are automatically assigned to the subfranchisor, who then assigns them to Anago. The subfranchisor is also responsible for ensuring that these individuals cooperate with Anago in documenting and protecting these innovations, even after their relationship with the subfranchisor has ended. This may require the subfranchisor to maintain detailed records of all innovations and to actively monitor the activities of their employees, contractors, and unit franchisees to identify any potential innovations.