What happens if a Fitstop franchisee fails to notify Fitstop about a new concept, process, or improvement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchise Agreement provides that if you, your employees, or principals develop any new concept, process or improvement in the operation or promotion of any System Business, you will promptly notify us and provide us with all necessary related information, without compensation. Any new concept, process or improvement will become our sole property and we will be the sole owner of all patents, patent applications, trademarks, copyrights and other intellectual property rights related to such new concepts. You and your principals will assign to us any rights you may have or acquire in new concepts you or your employees develop, including the right to modify such concept, process or improvement, and otherwise will waive and/or release all rights of restraint and moral rights to any new concepts you or your employees develop. You and your principals agree to assist us in obtaining and enforcing the intellectual property rights to any such concept, process or improvement in any and all countries and further agree to execute and provide us with all necessary documentation for obtaining and enforcing such rights. You and your principals will irrevocably designate and appoint us as your agent and attorney-in-fact to execute and file any such documentation and to do all other lawful acts to further the prosecution and issuance of patents or other intellectual property rights related to any such concept, process or improvement. In the event that these provisions in the Franchise Agreement are found to be invalid or otherwise unenforceable, you and your principals will grant to us a worldwide, perpetual, non-exclusive, fully-paid license to use and sublicense the use of the concept, process or improvement to the extent such use or sublicense would, absent the Franchise Agreement, directly or indirectly infringe on your rights to the new concepts.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 38–40)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee, their employees, or principals develop any new concept, process, or improvement related to the System Business, they must promptly notify Fitstop and provide all necessary related information without compensation. This requirement ensures that Fitstop is aware of and can potentially utilize any advancements made within the franchise system.
Any new concept, process, or improvement automatically becomes the sole property of Fitstop. Fitstop will be the sole owner of all related patents, patent applications, trademarks, copyrights, and other intellectual property rights. The franchisee and their principals must assign any rights they have or acquire in these new concepts to Fitstop, including the right to modify them. They also waive and release all rights of restraint and moral rights to any new concepts developed by them or their employees.
The franchisee and their principals must assist Fitstop in obtaining and enforcing intellectual property rights to any such concept, process, or improvement in any and all countries. They must also execute and provide all necessary documentation for obtaining and enforcing such rights. Furthermore, the franchisee irrevocably designates and appoints Fitstop as their agent and attorney-in-fact to execute and file any such documentation and to perform all other lawful acts to further the prosecution and issuance of patents or other intellectual property rights related to any such concept, process, or improvement. In the event that these provisions in the Franchise Agreement are found to be invalid or otherwise unenforceable, the franchisee and their principals will grant to Fitstop a worldwide, perpetual, non-exclusive, fully-paid license to use and sublicense the use of the concept, process or improvement.
In practical terms, this means a Fitstop franchisee cannot independently commercialize or protect any innovations they develop within their Fitstop business. All such developments become the property of Fitstop, which has the right to use them across the entire franchise system. This clause is fairly standard in franchising, as it allows the franchisor to maintain consistency and control over the brand and operating system. However, it's crucial for franchisees to understand that they will not receive any direct financial benefit or recognition for innovations they contribute to the system.