If Chatime wishes to register intellectual property rights in a franchisee's improvements and the franchisee is the owner, what actions must the franchisee take upon request by Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (3) If Franchisor wishes to register the intellectual property rights in any of Franchisee's Improvements and Franchisee is the owner, or a necessary applicant for that registration, Franchisee must immediately upon the request by Franchisor apply in Franchisee's own name for registration and then sign all documents and deeds, perform all acts and do all things necessary to assign that registration or application to Franchisor or its nominee.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, if a franchisee develops improvements to the Chatime system and retains ownership of the intellectual property rights, the franchisee has specific obligations if Chatime wants to register those rights. Upon Chatime's request, the franchisee must apply for registration of the intellectual property rights in their own name.
After applying for the registration, the franchisee must sign all necessary documents and deeds. They also must perform all actions and tasks required to assign the registration or application to Chatime or its designated nominee. This means the franchisee is responsible for fully cooperating with Chatime to transfer the rights to the improvements.
This clause ensures that Chatime can protect and utilize any franchisee-developed improvements to the Chatime system. It also makes sure that Chatime maintains control over its intellectual property. For a prospective franchisee, this highlights the importance of understanding intellectual property rights and the obligation to assign or license any improvements made to Chatime to Chatime.