Does Chatime retain intellectual property rights in the software used in the point of sale system?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
anchisee's lease for the Premises; and (d) any other document produced by the Franchisor from time to time that relates to the occupation of the Premises or the operation and procedure of the Franchised Business, and Franchise Document means any one of the foregoing.
Franchised Business means the Chatime Store Business operated by the Franchisee from the Premises in accordance with the Franchise Documents.
Intellectual Property means the: (a) the Business Names; (b) the Marks; (c) the Confidential Information; (d) the Business System; (e) the Franchise Documents; (f) the Database; (g) the POS Software System; (h) any other forms, documents, patents, patent applications, drawings, discoveries, inventions, improvements, trade secrets, technical data, formulae, computer programs, data bases (but not including the Franchisee Membership Data), know-how, logos, designs, design rights and copyright materials associated with or used in the Franchised Business; (i) existing and future copyright that the Franchisor owns or will own or that is licensed to the Franchisor, in all Manuals, materials or other original works relating to the Business System; (j) the Franchisor's Internet domain name and any Internet home page that the Franchisor may develop; (k) any social media sites operated by the Franchisor using the Franchisor's Marks including, but not limited to, Facebook, Instagram, Twitter, YouTube, LinkedIn and Snapchat; (l) the Franchisor's marketing emblems, logos, promotional materials, advertorials, publications and any other materials imparted to the Franchisee by the Franchisor;
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Chatime retains all intellectual property rights to the POS (Point of Sale) Software System. The FDD defines "Intellectual Property" to include, among other things, the "POS Software System".
This means that while franchisees are required to use a POS system nominated or approved by Chatime, they do not own any rights to the software itself. Chatime maintains ownership and control over the POS system software.
This is a common practice in franchising, as it allows the franchisor to maintain consistency and control over the brand's technology and data. Chatime franchisees must ensure connectivity at their outlet to allow data generated by the POS system to be captured by Chatime's central polling server and are responsible for all initial and ongoing costs associated with this data capture.