If a franchisee of Moes Southwest Grill creates an Innovation, who owns it and what obligations does the franchisee have?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.7 Innovations. All ideas, concepts, techniques, or materials relating to a Business or the System or derivations or modifications of the Intellectual Property or any other element of the System (collectively, "Innovations"), whether or not protectable intellectual property and whether created by or for you or your Owners, employees, or contractors, must be promptly disclosed to us and will be deemed to be our sole and exclusive property, part of the System and the Intellectual Property, and works made-for-hire for us. To the extent any Innovation does not qualify as a work made-for-hire for us, by this Section you assign ownership of that Innovation, and all related rights to that Innovation, to us and agree to sign (and to cause your Owners, employees, and contractors to sign) whatever assignment or other documents we request to evidence our ownership or to help us obtain intellectual property rights in the Innovation. We and our affiliates have no obligation to make any payments to you or any other person with respect to any Innovations. You may not use any Innovation in operating the Franchised Business or otherwise without our prior approval.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, any innovations created by a franchisee, their owners, employees, or contractors related to the business, the System, or the Intellectual Property automatically become the sole and exclusive property of Moe's Southwest Grill. These innovations are considered part of the System and the Intellectual Property, and are classified as works made-for-hire for the franchisor.
The franchisee is obligated to promptly disclose any such innovations to Moe's Southwest Grill. If an innovation does not legally qualify as a work made-for-hire, the franchisee must assign ownership of the innovation and all related rights to Moe's Southwest Grill. This includes signing any documents that Moe's Southwest Grill requests to evidence their ownership or to help them obtain intellectual property rights for the innovation.
Moe's Southwest Grill is not obligated to provide any payment or compensation to the franchisee or anyone else for these innovations. Furthermore, the franchisee is prohibited from using any innovation in operating the Franchised Business or in any other way without obtaining prior approval from Moe's Southwest Grill. This clause ensures that Moe's Southwest Grill maintains complete control over any improvements or modifications to their system, even those developed by franchisees, and can implement them across the franchise network as they see fit.