Does the Mr. Sandless franchisee's obligation to transfer Electronic Advertising apply even if the acquisition of that advertising was a violation of the Franchise Agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
2.1 Interest in Websites, Social Media, and Software Accounts and Other Electronic Listings. Franchisee may acquire (whether in accordance with or in violation of the Franchise Agreement) during the term of Franchise Agreement, certain right, title, or interest in and to certain domain names, social media accounts, software accounts, hypertext markup language, uniform resource locator addresses, access to corresponding internet websites, and the right to hyperlink to certain websites and listings on various internet search engines (collectively, "Electronic Advertising") related to the Franchised Business or the Marks.
2.2 Interest in Telephone Numbers and Listings. Franchisee has or will acquire during the term of the Franchise Agreement, certain right, title, and interest in and to those certain telephone numbers and regular, classified, internet page, and other telephone directory listings (collectively, the "Telephone Listings") related to the Franchised Business or the Marks.
2.3 Transfer.
On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, a franchisee is obligated to transfer Electronic Advertising to the franchisor upon termination of the Franchise Agreement, regardless of whether the acquisition of that advertising was in compliance with the agreement or a violation of it. Electronic Advertising includes domain names, social media accounts, software accounts, and website listings related to the Mr. Sandless business or marks. This obligation also extends to telephone numbers and listings acquired during the franchise term.
This means that even if a Mr. Sandless franchisee developed online advertising in a way that breached the Franchise Agreement, they are still required to transfer the rights to that advertising to Mr. Sandless upon termination or at the franchisor's request. This could include situations where the franchisee created unauthorized websites or social media accounts using Mr. Sandless's trademarks.
This provision protects Mr. Sandless's brand and online presence by ensuring that all online assets related to the brand are transferred back to the company, even if the franchisee's actions were not initially approved. For a prospective franchisee, this highlights the importance of adhering to the franchise agreement when developing online advertising and understanding that all such assets ultimately belong to the franchisor.