If a Burros Fries franchisee develops a new piece of equipment, who owns it?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
If you or your partners, members, managers, directors, shareholders, employees, agents or independent contractors develop any new piece of equipment, product, recipe, formula, concept, technique, process, photographs, video presentations, promotions, program or improvement in the operation or promotion of your Business, you are required to promptly notify us with all necessary related information, without compensation. However, as a matter of corporate policy, we may create an incentive program to reward you, your partners, members, managers, directors, shareholders, employees, agents or independent contractors for any new piece of equipment, product, recipe, formula, concept, technique, process, photograph, video presentation, promotion, program or improvement that we implement throughout the System. You and if you are an Entity, then one of your Owners acknowledge that any such equipment, product, recipe, formula, concept, process, program or improvement will become our property and we may use or disclose such information to other franchisees as we deem appropriate.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 42–44)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, any new equipment, product, or improvement developed by a franchisee or their personnel in the operation or promotion of their Burros Fries business becomes the property of the franchisor. The franchisee is required to promptly notify Burros Fries of any such development with all necessary related information, without expecting compensation. However, Burros Fries may create an incentive program to reward franchisees for innovations that are implemented throughout the Burros Fries system.
This policy means that while a Burros Fries franchisee might innovate and improve their business, the benefits of those innovations, in terms of ownership and control, accrue to the franchisor. Burros Fries retains the right to use or disclose such information to other franchisees as they deem appropriate. This is a fairly standard practice in franchising, as it allows the franchisor to maintain consistency and quality across the brand.
For a prospective Burros Fries franchisee, this underscores the importance of understanding the terms of the Franchise Agreement regarding intellectual property. While franchisees are encouraged to contribute to the system's improvement, they should be aware that they will not own the rights to their inventions. The potential for an incentive program offers some reward, but the ultimate decision to implement and compensate for the innovation lies with Burros Fries. Franchisees should inquire about the details of any existing incentive programs to fully understand the potential benefits.