For an Auntie Annes SRU, what happens to the intellectual property rights of any modifications made to the SRU?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Changes and modifications to the SRU, including building a new SRU if necessary ("Modifications"), which are not required by Lessor must be approved in advance by Lessor. The costs to make Modifications and to restore the SRU to its pre-modified condition, if applicable, are the responsibility of the Lessee. Any such changes shall become part of the SRU and the Lessee shall not be entitled to remove them or obtain compensation for them. Lessor shall own the intellectual property rights to any such Modifications, including any related designs.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, any changes or modifications to the Satellite Retail Unit (SRU) that are not required by the Lessor must receive advance approval from the Lessor. The franchisee (Lessee) is responsible for covering the costs associated with these modifications and restoring the SRU to its original condition if necessary.
Importantly, any modifications made to the SRU become part of the SRU, and the franchisee is not entitled to remove them or receive compensation for them. The Lessor retains ownership of the intellectual property rights to any such modifications, including any related designs.
This means that while a franchisee can propose and implement changes to their Auntie Annes SRU with approval, they will not own any intellectual property rights related to those changes. This could impact a franchisee who develops a successful modification, as they would not be able to independently commercialize or protect that innovation. The franchisor maintains control and ownership of all intellectual property associated with the SRU, including any franchisee-led modifications.