Upon expiration or termination of the Burros Fries franchise agreement, will any monetary amount be assigned to the licensed Confidential Information, trade secrets, copyrights, and patents used by the franchisee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
F. Franchisee Shall Not Contest the Franchisor's Ownership Right To Any Confidential Information, Trade Secrets, Patents or Copyrights
Franchisee expressly understands and acknowledges that:
-
- We are the owner of our Confidential Information, trade secrets, copyrights, and patent rights;
-
- Franchisee shall not directly or indirectly contest the validity or the ownership of our Confidential Information, trade secrets, copyrights, and patents;
-
- Franchisee's use of our Confidential Information, trade secrets, copyrights, and patents does not give Franchisee any ownership interest or other interest in or to the Confidential Information, trade secrets, copyrights, and patents, except the non-exclusive Franchise granted herein;
-
- Any goodwill arising from Franchisee's use of the Confidential Information, trade secrets, copyrights, and patents in its Business under the System shall inure solely and exclusively to our benefit, and upon expiration or termination of this Agreement and the Franchise herein granted, no monetary amount shall be assigned as attributable to any licensed Confidential Information, trade secrets, copyrights, and patents;
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, upon expiration or termination of the franchise agreement, no monetary amount will be assigned to the licensed Confidential Information, trade secrets, copyrights, and patents used by the franchisee. Burros Fries retains ownership of these assets, and any goodwill arising from their use by the franchisee will accrue exclusively to Burros Fries.
This means that a franchisee will not receive any compensation for the value of the brand's intellectual property or trade secrets that they utilized during the term of their franchise agreement. The franchisee's right to use these assets ceases upon termination or expiration of the agreement, and all associated benefits revert back to Burros Fries.
This is a standard practice in franchising, as the franchisor typically owns the intellectual property and grants franchisees a limited license to use it. This provision ensures that Burros Fries maintains control over its brand and proprietary information, and that franchisees do not gain any ownership rights to these assets through their operation of a franchise.