Copyright in the operations manual

A franchisee may meet this term in the franchise agreement, or when selling or transferring the unit. The Canadian Franchise Association describes the operations manual as fully explaining how a franchisee is to replicate the franchise’s system at their location. A manual is a written work, and the Canadian Intellectual Property Office says copyright protects original literary works in a fixed form, such as text, provided the conditions in the Copyright Act are met. See what you own when you buy a franchise.

What the Copyright Act says

Section 13(1) says that, subject to the Act, the author of a work is the first owner of the copyright in it. Under s. 13(3), where the author was employed under a contract of service or apprenticeship and made the work in the course of that employment, the employer is the first owner in the absence of any agreement to the contrary; the subsection reserves a right to the author where the work is a contribution to a newspaper, magazine or similar periodical. Under s. 13(4), no assignment or grant is valid unless it is in writing signed by the owner of the right, or the owner’s duly authorized agent. The Office adds that a licence gives permission to use a work while the owner keeps ownership. Compare first owner of copyright.

What to ask

• Does the franchise agreement say who owns the manual, and is any assignment or licence in writing?
• What must the franchisee do with the manual and its copies when the agreement ends or is transferred?
• Will the buyer receive its own licence to use the manual, and on what terms?