Can a Burros Fries franchisee contest the ownership rights of the software?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee will be licensed to use the software only for Franchisee's internal, in-house data processing and data communications purposes and only in connection with the Business and not for re-marketing or redistribution under any circumstances;
- b.
Franchisee acknowledges and agrees that we (or any of our affiliates) will be the sole and exclusive owner of all right, title and interest in and to our Software, including all trade secrets and copyrights related to the Software, subject only to the rights we expressly license to Franchisee in this Agreement.
This license will not provide Franchisee with title or ownership of the Software, but only a limited right of use.
Franchisee agrees that Franchisee will not contest or otherwise seek to share, diminish or invalidate our ownership rights in our Software;
- c.
Franchisee will not modify the Software in any way without our prior written consent.
Franchisee will promptly disclose to us all ideas and suggestions for modifications or enhancements to the Software that Franchisee conceives or develops, and we will have the right to use such ideas and suggestions.
We shall own all copyrights and other intellectual property rights to all modifications and suggestions proposed by Franchisee.
The term "all copyrights and other intellectual property rights" shall mean all means, methods, and process, by all media whether now known or hereinafter invested, including complete and entire interactive rights and rights to derivative works.
This Agreement shall be a work for hire.
In the event that a court of competent jurisdiction holds that this Agreement is not a work for hire, then the Franchisee agrees to execute all documents that we deem is necessary to assign all copyright and other intellectual property rights to us.
All modifications or enhancements made to the Software will be our property and belong exclusively to us, without regard to the source or creator of the modification or enhancement, however we may provide incentive programs for such contributions;
- d.
We will have the right at all times to access Software and to retrieve, analyzeand use all the data related to the Business in Franchisee's files stored on Franchisee's POS system, computers, tablets or any other computer-related system.
Additionally, Franchisee will electronically transfer all files and reports related to the Business to us on our request.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, franchisees are prohibited from contesting the ownership rights to the software. The FDD states that Burros Fries (or its affiliates) retains sole and exclusive ownership of all rights, title, and interest in the software, including trade secrets and copyrights, only licensing specific usage rights to the franchisee. This license does not grant the franchisee any ownership of the software.
Specifically, the agreement stipulates that franchisees agree not to contest, diminish, or invalidate Burros Fries's ownership rights in the software. Furthermore, any modifications or enhancements to the software, regardless of their origin, become the exclusive property of Burros Fries. The company also has the right to access the software and data on the franchisee's systems.
This clause is fairly standard in franchise agreements, as franchisors typically want to maintain strict control over their proprietary software and intellectual property. This ensures consistency and protects their brand. For a prospective Burros Fries franchisee, this means they must acknowledge and accept that they will never have any ownership claim to the software they use in their business. They are also obligated to transfer any intellectual property rights from suggestions they propose to Burros Fries.