Does the Mr. Sandless indemnification clause extend to the franchisor's affiliates?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
We shall own and have the exclusive right to use and incorporate in the System, for the benefit of other franchisees, us and our affiliates, any modifications, changes and improvements (collectively, "improvements") to the System, in whole or in part, developed or discovered by you, your principals or your employees or agents in connection with the System or the operation of a Business, without any liability or obligation to you. This includes, but is not limited to, discoveries or development of products, systems or techniques, management practices or procedures, architectural designs and philosophies and names or groups of words relating to the System or describing the services offered by Mr. Sandless Businesses. You acknowledge and agree that nothing in this Section 11.8 permits you to test, introduce, provide, or otherwise offer any Improvements to customers, or use any Improvement in the operation of the Franchised Business, unless and until Franchisor consents to the use of the Improvement for such purpose.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, the franchise agreement includes provisions for indemnification that extend to the franchisor's affiliates. Specifically, the franchisee agrees to allow Mr. Sandless to use any improvements to the system that the franchisee develops for the benefit of other franchisees, Mr. Sandless, and its affiliates.
This means that any modifications, changes, or improvements to the Mr. Sandless system developed by the franchisee, their employees, or agents become the property of Mr. Sandless. These improvements can include new products, systems, techniques, management practices, architectural designs, and names related to the Mr. Sandless business. Mr. Sandless and its affiliates have the exclusive right to use these improvements for the benefit of the entire franchise system.
This clause has significant implications for franchisees. While franchisees may innovate and improve their Mr. Sandless business, they do not retain ownership or control over these innovations. Mr. Sandless can incorporate these improvements into the standard system and allow other franchisees to use them without compensating the originating franchisee. Franchisees should consider this when deciding whether to invest time and resources into developing improvements to the Mr. Sandless system, as the benefits of their work will primarily accrue to the franchisor and its affiliates.