Is the Burros Fries franchisee's license to use the franchisor's copyrights exclusive?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Any rights not expressly granted to the Franchisee are reserved to us. Such rights reserved to us include but are not limited to the following:
-
- Own and/or operate ourselves, and/or authorize others to own and/or operate:
a) Any kind of business in the Territory which is not substantially similar to a Burros & Fries Business, whether or not using the Marks and System and on any terms and conditions we deem appropriate; and
b) Any kind of business outside of the Territory, including, without limitation, Burros & Fries Businesses, whether or not using Burros & Fries Marks and System and on any terms and conditions we deem appropriate;
-
- Develop, distribute and sell Burros & Fries labeled and branded (or any other brand) products and kitchen equipment (if developed) to anyone located anywhere (including within the Territory, if applicable) using any channel of distribution other than the operation of a Burros & Fries Business in the Territory and on any terms and conditions we deem appropriate;
-
- Develop or become associated with concepts other than the Business franchised hereunder (including dual branding and/or other franchise systems), whether or not using the System and/or the Marks, and award franchises under such other concepts for businesses located and/or operating anywhere;
-
- Acquire, be acquired by, sell our assets, sell our stock, membership units, or partnership units to, merge, affiliate with or engage in any transaction with other businesses (whether competitive or not), with units located anywhere.
Such transactions may include (but are not limited to) arrangements involving competing outlets and brand conversions (to or from the Burros & Fries Marks and System).
Franchisee agrees to participate at its expense in any such conversion as instructed by us;
-
- We may choose in our Business Judgment (as defined in Section 21 of this Agreement) to advertise, offer and sell Products and/or provide Services through the Internet and other similar venues (no matter where the person is located) without paying any compensation to Franchisee.
The Internet is a channel of distribution reserved exclusively to us and Franchisee may not independently market on the Internet or conduct e-commerce, without our written consent; and
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, the franchise agreement grants franchisees a license to use Burros Fries' names and marks, but this license is not exclusive. The agreement specifies that Burros Fries reserves rights not expressly granted to the franchisee. These reserved rights include the ability to operate or authorize others to operate businesses, including Burros Fries businesses, outside the franchisee's territory, regardless of whether they use the Burros Fries marks and system. This indicates that Burros Fries retains the right to use its trademarks and system in various ways, including through other franchisees or company-owned operations.
Burros Fries also reserves the right to develop, distribute, and sell Burros Fries labeled products and kitchen equipment through any channel of distribution outside of the franchisee's territory. They can also develop or associate with other concepts, including dual branding, and award franchises under these concepts, even if they use the Burros Fries system or marks. This further emphasizes that the franchisee's rights to use the Burros Fries intellectual property are limited and non-exclusive.
Additionally, Burros Fries retains the right to advertise and sell products and services through the Internet and other similar venues without compensating the franchisee. The Internet is considered a distribution channel exclusively reserved to Burros Fries, and franchisees need written consent to market online or conduct e-commerce. This condition reinforces that the franchisee's license is not exclusive and that Burros Fries maintains control over key aspects of the brand's use and distribution.