Who bears the cost of registering intellectual property rights for Chatime franchisee improvements if the franchisee is the owner and a necessary applicant?

According to Chatime's 2025 Franchise Disclosure Document, if a franchisee develops any improvements to the Chatime system that result in intellectual property rights, the franchisee is generally required to assign those rights to Chatime. However, if the intellectual property rights are not capable of being assigned, the franchisee must grant Chatime an exclusive, worldwide, royalty-free, fully assignable perpetual license to use those improvements.

Specifically, if Chatime wants to register the intellectual property rights for any franchisee improvements and the franchisee is the owner or a necessary applicant for the registration, the franchisee must apply for registration in their own name at Chatime's request. Following this, the franchisee is obligated to sign all necessary documents and perform all actions to assign the registration or application to Chatime or its nominee. The FDD does not explicitly state who bears the cost of registering the intellectual property rights in this scenario.

Because the FDD does not specify who bears the costs of registering intellectual property rights for franchisee improvements, it is important for a prospective Chatime franchisee to seek clarification from the franchisor regarding this matter. Understanding the financial responsibility for these registration costs is crucial for budgeting and assessing the overall investment required to operate a Chatime franchise.