What happens to the rights to any Improvement developed by a Bang Cookies franchisee?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee agrees that with regard to the Franchised Business all customer lists and their contents and information represent Confidential Information and constitute an asset of Franchisor whether or not such information was supplied by Franchisor. During the Term of this Agreement and in connection with the development, establishment, marketing, promotion and operation of the Franchised Business, Franchisee shall disclose to Franchisor all of Franchisee's ideas, concepts, methods and products conceived or developed by Franchisee and Franchisee's affiliates, Owners, agents, and employees relating to the development and operation of Bang Cookies Shops. Franchisee hereby assigns to Franchisor and Franchisee agrees to procure from Franchisee's Owners, affiliates and employees assignment of any such ideas, concepts, methods, and products that Franchisee is required to disclose to Franchisor under this Article 6.I. Franchisor shall have no obligation to make any lump sum or on-going payments to Franchisee or Franchisee's Owners, affiliates or employees with respect to any such idea, concept, method, technique or product. Franchisee agrees that Franchisee will not use nor will Franchisee allow any other person or entity to use any such concept, method or product without obtaining Franchisor's prior written approval.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, any ideas, concepts, methods, and products related to the development and operation of Bang Cookies shops that are conceived or developed by a franchisee (including their owners, affiliates, agents, and employees) must be disclosed to Bang Cookies. The franchisee is required to assign all rights to these innovations to Bang Cookies. This includes procuring assignments from the franchisee's owners, affiliates, and employees.
Bang Cookies is not obligated to provide any payment (lump sum or ongoing) to the franchisee or their related parties for these ideas, concepts, methods, techniques, or products. The franchisee is prohibited from using or allowing anyone else to use these innovations without obtaining Bang Cookies's prior written approval.
This clause means that any improvements or innovations a franchisee develops for their Bang Cookies shop, even if they significantly enhance the business, become the property of the franchisor without any compensation to the franchisee. This is a significant consideration for prospective franchisees, as it means they will not directly benefit financially from their own creative contributions to the Bang Cookies system. It is fairly common practice in the franchise industry for the franchisor to own any improvements to the brand, but franchisees may want to negotiate some form of compensation or recognition for significant innovations.