If a franchisee of Itan independently develops an improvement, is it still considered intellectual property?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
oss Sales. The Manual may also provide details on the calculation of Gross Sales relating to membership fees and qualifying purchases and redemptions by members under a loyalty or membership program.
- "Improvement" means any idea, addition, modification or improvement to the (a) goods or services offered or sold at a Salon, (b) method of operation of a Salon, (c) processes, systems or procedures utilized by a Salon, (d) marketing, advertising or promotional materials, programs or strategies utilized by a Salon or (e) trademarks, service marks, logos or other intellectual property utilized by a Salon, whether developed by you, your Owners, your employees or any other Person.
- "Indemnified Parties" means and includes us and each of our past, present and future owners, members, officers, directors, employees and agents, as well as our parents, subsidiaries and affiliates, and each of their past, present and future owners, members, officers, directors, employees and agents.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, any improvement developed by a franchisee, regardless of who developed it, is considered intellectual property. The FDD defines "Improvement" as any idea, addition, modification, or improvement to various aspects of the salon, including goods, services, operations, processes, marketing, and intellectual property, whether developed by the franchisee, the franchisor, or any other person.
"Intellectual Property" is defined to include, collectively or individually, Business Data, Copyrighted Materials, Improvements, Know-how, Marks and System. This means that even if a franchisee independently comes up with a new idea or enhancement for the Itan salon, it automatically falls under the umbrella of Itan's intellectual property.
Furthermore, the franchisee employee or independent contractor agrees to assign all rights to any Improvement developed to Itan or its designee, including the right to grant sublicenses, without any charge. This assignment ensures that Itan maintains control and ownership over any advancements or modifications made to the system, regardless of their origin. If applicable law prevents the assignment of ownership, the franchisee agrees to perpetually license the improvement to Itan, free of charge, with full rights to use, commercialize, and sublicense it. This comprehensive approach ensures that Itan benefits from all improvements while maintaining uniformity and brand consistency across all franchise locations.