Who owns the goodwill associated with the Intellectual Property of the Fly Fitness franchise?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Website, and the Manual, whether or not Franchisor has filed for copyrights thereto with the U.S. Copyright Office. The Marks and copyrights are hereafter together 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.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly A Fitness Revolution, LLC, or its successor, is the record owner of the Marks. As between Fly Fitness and the franchisee, Fly A Fitness Revolution, LLC, and Fly Fitness are the owner of all right, title, and interest in and to the Intellectual Property and the goodwill associated with and symbolized by them. This means that Fly Fitness retains ownership of its brand's intellectual property and the goodwill associated with it. The franchisee's use of the Intellectual Property benefits Fly Fitness. Upon expiration or termination of the Franchise Agreement, no monetary amount shall be assigned as attributable to any goodwill associated with Franchisee's use of the Intellectual Property.
This has significant implications for a prospective Fly Fitness franchisee. Even though the franchisee's efforts and investment contribute to building the brand's reputation and customer loyalty in their specific location, the monetary value of that goodwill ultimately belongs to Fly Fitness. This is a common arrangement in franchising, as it ensures the franchisor maintains control over the brand and its image.
Upon termination or expiration of the agreement, the franchisee cannot claim any financial compensation for the goodwill they helped create during the term of their franchise agreement. This underscores the importance of understanding the terms of the franchise agreement, particularly regarding intellectual property and goodwill, before investing in a Fly Fitness franchise.