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What is the Devon Creek franchisee's obligation regarding assignments related to the Intellectual Property?

Devon_Creek Franchise · 2024 FDD

Answer from 2024 FDD Document

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14. INTELLECTUAL PROPERTY

14.1 Ownership.

14.1.1. Franchisee expressly understands and acknowledges that Devon Creek IP, LLC or its successor, ("Licensor") is the record owner of the Marks. Franchisor holds the exclusive right to license the Marks to franchisees of the System for use pursuant to the System. Franchisee further expressly understands and acknowledges that Franchisor and/or Licensor claims copyrights on certain material used in the System, including but not limited to its website, documents, advertisements, promotional materials and the Manual, whether or not Franchisor has filed for copyrights thereto with the U.S. Copyright Office. The Marks and copyrights, along with Franchisor's trade secrets, service marks, trade dress and proprietary systems are hereafter collectively referred to as the "Intellectual Property".

  • 14.1.2. As between Franchisor and Franchisee, Licensor and Franchisor are the owner of all right, title and interest in and to the Intellectual Property and the goodwill associated with and symbolized by them.
  • 14.2 No Interference. Neither Franchisee nor any Principal shall take any action that would prejudice or interfere with the validity of Franchisor's or Licensor's rights with respect to the Intellectual Property. Nothing in this Agreement shall give the Franchisee any right, title, or interest in or to any of the Intellectual Property or any of Franchisor's or Licensor's service marks, trademarks, trade names, trade dress, logos, copyrights or proprietary materials, except the right to use the Intellectual Property and the System in accordance with the terms and conditions of this Agreement for the operation of a Franchised Business and only at or from the Franchised Business office location or in approved advertising related to the Franchised Business.
  • 14.3 Goodwill. Franchisee understands and agrees that any and all goodwill arising from Franchisee's use of the Intellectual Property and the System shall inure solely and exclusively to the benefit of Franchisor and Licensor, and upon expiration or termination of this Agreement and the license herein granted, no monetary amount shall be assigned as attributable to any goodwill associated with Franchisee's use of the Intellectual Property.
  • 14.4 Validity. Franchisee shall not contest the validity of, or Franchisor's or Licensor's interest in, the Intellectual Property or assist others to contest the validity of, or Franchisor's or Licensor's interest in, the Intellectual Property.
  • 14.5 Infringement. Franchisee acknowledges that any unauthorized use of the Intellectual Property shall constitute an infringement of Franchisor's or Licensor's rights in the Intellectual Property and a material event of default hereunder. Franchisee shall provide Franchisor or Licensor with all assignments, affidavits, documents, information and assistance Franchisor or Licensor reasonably requests to fully vest in Franchisor or Licensor all such rights, title and interest in and to the Intellectual Property, including all such items as are reasonably requested by Franchisor or Licensor to register, maintain and enforce such rights in the Intellectual Property.
  • 14.6 Substitution. Franchisor reserves the right to substitute different Marks for use in identifying the System and the Franchised Business, if it in its sole discretion, determines that substitution of different Marks will be beneficial to the System. Franchisor will not be liable to Franchisee for any expenses, losses or damages sustained by Franchisee as a result of any additions, modifications, substitutions or discontinuation of the Marks. Franchisee covenants not to commence or join in any litigation or other proceeding against Franchisor for any of these expenses, losses or damages.
  • 14.7 Franchisee's Use of the Intellectual Property. With respect to Franchisee's use of the Intellectual Property pursuant to this Agreement, Franchisee further agrees that:

  • 14.7.1 Unless otherwise authorized or required by Franchisor, Franchisee shall advertise the Franchised Business only under the Marks "Devon Creek" and design. Franchisee shall not use the Marks, or any portions, variations, or derivatives thereof as part of its corporate or other legal name. All fictitious names used by Franchisee shall bear the designation "a Devon Creek".
  • 14.7.2. Franchisee shall identify itself as the owner of the Franchised Business and as an independent Devon Creek franchisee in conjunction with any use of the Intellectual Property, including, but not limited to, uses on invoices, order forms, receipts and contracts, as well as the display of a notice in such content and form and at such conspicuous location upon the office and vehicle(s), as directed by Franchisor, used in the Franchised Business, as Franchisor may designate in writing.
  • 14.7.3. Franchisee shall not use the Intellectual Property to incur any obligation or indebtedness on behalf of Franchisor.
  • 14.7.4.

Source: Item 22 — CONTRACTS (FDD page 45)

What This Means (2024 FDD)

According to the 2024 Devon Creek Franchise Disclosure Document, franchisees have specific obligations regarding intellectual property. Devon Creek IP, LLC owns the marks, and Devon Creek holds the exclusive right to license these marks to franchisees. Franchisees must understand that neither they nor any principal can take any action that would prejudice or interfere with the validity of Devon Creek's or its licensor's rights regarding the intellectual property. Franchisees do not gain any right, title, or interest in the intellectual property, except the right to use it according to the franchise agreement for operating their franchised business.

Upon termination or expiration of the franchise agreement, the franchisee must immediately cease using the marks, copyrighted material, or any intellectual property associated with Devon Creek. This includes refraining from identifying themselves as a current Devon Creek owner, franchisee, or licensee. Franchisees must also take necessary actions to cancel any assumed name registrations that contain Devon Creek's marks and provide evidence of compliance to Devon Creek within ten days of termination or expiration.

Devon Creek retains the right to assign the Franchise Agreement to another party without the franchisee's permission or prior knowledge. This includes scenarios such as selling assets, engaging in security placements, merging with or being acquired by another corporation, or undergoing financial restructuring. The franchisee waives any claims related to the loss of association with Devon Creek in such cases. Devon Creek is not obligated to remain in the franchised business or offer the same products and services if it assigns its rights under the agreement.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.