Is the license granted by the Buildingstars franchisee to Buildingstars for innovations exclusive or non-exclusive?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
- G. Innovations. All ideas, concepts, techniques or materials concerning the Business, whether or not protectable intellectual property and whether created by FRANCHISEE or its owners or employees, must be promptly disclosed to BUILDINGSTARS and will be deemed to be BUILDNGSTARS' sole and exclusive property, part of the System, and works made-for-hire for BUILDINGSTARS. To the extent any item does not qualify as a "work made-for-hire" for BUILDINGSTARS, FRANCHISEE must assign ownership of that item and all related rights to that item, to BUILDINGSTARS and must take whatever action (including signing assignments or other documents) BUILDINGSTARS requests to show BUILDINGSTARS' ownership or help BUILDINGSTARS obtain intellectual property rights in the item. However, if this provision is found to be invalid or unenforceable, FRANCHISEE grants to BUILDINGSTARS a worldwide, perpetual, non-exclusive and fully paid license to use and sublicense the use of the ideas, concepts, techniques or materials.
Source: Item 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to the 2025 Buildingstars Franchise Disclosure Document, any innovations created by a franchisee related to the Buildingstars business are considered the sole and exclusive property of Buildingstars. These innovations are classified as part of the Buildingstars system and are treated as works made for hire. This means Buildingstars owns all rights to these innovations.
However, if the "work made-for-hire" provision is deemed invalid or unenforceable, the franchisee grants Buildingstars a worldwide, perpetual, non-exclusive, and fully paid license to use and sublicense the use of these ideas, concepts, techniques, or materials. This ensures that even if Buildingstars cannot claim full ownership, they still have the right to utilize and allow others to utilize the franchisee's innovations.
In practical terms, this means that as a Buildingstars franchisee, you must disclose any new ideas or improvements related to the business to Buildingstars. While Buildingstars prefers to own these innovations outright, the non-exclusive license provides a fallback that allows them to still benefit from franchisee-developed improvements to the system. This clause ensures Buildingstars can maintain and develop its system using franchisee input, while also protecting its interests should the ownership provision be challenged.