What rights does a Fitstop franchisee assign to the franchisor regarding new concepts they develop?
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 means Fitstop franchisees are obligated to disclose any innovations they create related to the Fitstop system.
Any new concept, process, or improvement developed by the franchisee automatically becomes the sole property of Fitstop. Fitstop will be the sole owner of all patents, patent applications, trademarks, copyrights, and other intellectual property rights related to these new concepts. The franchisee and their principals will assign to Fitstop any rights they may have or acquire in these new concepts, including the right to modify them. They also waive and/or release all rights of restraint and moral rights to any new concepts they or their employees develop. This essentially means that Fitstop has complete control over any innovations created by its franchisees.
The franchisee and their principals agree to assist Fitstop in obtaining and enforcing the intellectual property rights to any such concept, process, or improvement in any and all countries. They further agree to execute and provide Fitstop with all necessary documentation for obtaining and enforcing such rights. The franchisee and their principals irrevocably designate and appoint Fitstop as their 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. This ensures that Fitstop has the legal authority to protect and utilize any innovations developed by its franchisees.
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 to the extent such use or sublicense would, absent the Franchise Agreement, directly or indirectly infringe on the franchisee's rights to the new concepts. This provides Fitstop with a fallback option to continue using the franchisee's innovations even if the initial assignment of rights is deemed invalid.