Does the obligation to assign ownership of innovations to Red Wagon Club extend to the franchisee's owners?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
You must promptly disclose to us all ideas, concepts, methods, techniques, and products conceived or developed by you and/or any of your affiliates, owners, agents, representatives, contractors or employees relating to the development or operation of your RWC Business or other RWC Businesses ("Innovations"), whether or not protectable intellectual property and whether created by or for you or your owners or employees. All Innovations are our sole and exclusive property and works made-for-hire for us and shall constitute our Confidential Information. To the extent any Innovation does not qualify as a work made-forhire for us, by this Section you assign ownership of that Innovation, and all related rights to that Innovation, to us and will 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 your RWC Business or otherwise without our prior written approval.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 35–37)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, the obligation to assign ownership of innovations extends to the franchisee's owners. Red Wagon Club requires franchisees to promptly disclose all ideas, concepts, methods, techniques, and products conceived or developed relating to the Red Wagon Club business. This obligation applies not only to the franchisee but also to their affiliates, owners, agents, representatives, contractors, and employees.
The FDD states that all such innovations are the sole and exclusive property of Red Wagon Club and are considered works made-for-hire. To the extent that any innovation does not qualify as a work made-for-hire, the franchisee must assign ownership of that innovation and all related rights to Red Wagon Club. Furthermore, franchisees are obligated to ensure that their owners, employees, and contractors sign any assignment or other documents requested by Red Wagon Club to evidence their ownership or to help them obtain intellectual property rights in the innovation.
This means that if a franchisee, or anyone affiliated with their business, develops an innovation related to the Red Wagon Club business, the franchisee must transfer ownership of that innovation to Red Wagon Club. Red Wagon Club is not obligated to make any payments to the franchisee or any other person with respect to any innovations. The franchisee is also prohibited from using any innovation in operating their Red Wagon Club business without prior written approval from Red Wagon Club.