If a Crave franchisee develops an improvement in the operation of the Franchised Business, who owns the rights to that improvement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
10.2.3 New Concepts. If Franchisee or any Principal develops any new concept, process, recipe, product, service, or improvement in the operation or promotion of the Franchised Business ("Improvements"), Franchisee is required to promptly notify Franchisor and provide Franchisor with all related information, processes, products or other improvements, and sign any and all forms, documents and/or papers necessary for Franchisor to obtain full proprietary rights to such Improvements, without compensation and without any claim of ownership or proprietary rights to such Improvements. Franchisee and any Principal acknowledge that any such Improvements will become the property of Franchisor, and Franchisor may use or disclose such information to other franchisees as it determines to be appropriate.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 47–48)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, any improvements to the Franchised Business developed by a franchisee or their principals become the property of Crave. The franchisee is required to promptly notify Crave of any new concept, process, recipe, product, service, or improvement related to the operation or promotion of the Franchised Business.
Furthermore, the franchisee must provide Crave with all related information, processes, products, or other improvements. They are also obligated to sign any documents necessary for Crave to obtain full proprietary rights to these improvements. This transfer of ownership occurs without any compensation to the franchisee and without any claim of ownership or proprietary rights by the franchisee.
Crave retains the right to use or disclose this information to other franchisees as it deems appropriate. This clause ensures that Crave maintains control over any advancements or innovations within the franchise system, allowing them to standardize and disseminate best practices across all locations. This is a fairly standard practice in franchising, as it allows the franchisor to maintain uniformity and protect the brand's intellectual property.
This requirement means that while a Crave franchisee might innovate and improve their business, they will not directly benefit financially from those innovations beyond their own store's performance. The broader benefits, including potential system-wide implementation, accrue to the franchisor. Prospective franchisees should consider this when evaluating the potential return on investment and their role in contributing to the overall system's development.