Is Cinch I.T. obligated to make any payments to the franchisee for Innovations?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
You agree to promptly disclose to Us all Innovations, whether or not protectable intellectual property, and whether created by or for You or Your Owners or employees.
All Innovations will be deemed Our sole and exclusive property and works made-for-hire for Us.
We have the right to incorporate Innovations into the System and may use them and may authorize You and others to use them in the operation of CINCH I.T. businesses.
Innovations will then also constitute Confidential Information.
We will disclose to You Innovations that are made a part of the System in this manner.
To the extent any Innovation does not qualify as a work made-for-hire for Us, by this paragraph You assign ownership of that Innovation, and all intellectual property and other rights to the Innovation, to Us and agree to sign and deliver such instruments and documents, provide such assistance and perform such other acts as We periodically designate in order for Us or Our designee to obtain exclusive rights in such Innovations.
We will have no obligation to make any lump sum or other payments to You or any other person with respect to any such Innovations.
You will not use, nor will You allow any other person to use, any such Innovations, whether in connection with the Franchised Business or otherwise, without obtaining Our prior written approval.
You also agree that if You develop any new trademarks, service marks, trade names and trade symbols, trade dress, signs, slogans, associated logos, designs, e-marks,
copyrights, emblems, concepts, processes or improvements in the operation or promotion of the Franchised Business, We will immediately become sole owner and licensor.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, Cinch I.T. franchisees are required to promptly disclose all innovations to Cinch I.T., regardless of whether they are protectable intellectual property and regardless of who created them. These innovations become the sole and exclusive property of Cinch I.T. and are considered works made-for-hire. Cinch I.T. has the right to incorporate these innovations into its system and authorize their use by franchisees and others.
Cinch I.T. will disclose to the franchisee any innovations that are incorporated into the system. The franchisee also agrees to assign ownership of any innovation that does not qualify as a work made-for-hire to Cinch I.T., including all intellectual property rights. The franchisee must also sign documents and provide assistance to ensure Cinch I.T. obtains exclusive rights to these innovations.
Importantly, Cinch I.T. has no obligation to provide any payment to the franchisee or any other person for these innovations. The franchisee is also prohibited from using these innovations without prior written approval from Cinch I.T., whether in connection with the franchised business or otherwise. Additionally, any new trademarks, service marks, or other intellectual property developed by the franchisee immediately become the sole property of Cinch I.T.