What rights does the Angry Chickz franchisee have regarding the use of marks and the system?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
sound business practices, which shall provide for accounting information necessary to prepare financial statements, a general ledger and reports required by this Agreement and the Manual(s). Franchisee shall maintain accurate, adequate and verifiable books and supporting documentation relating to such accounting information.
ARTICLE 11 TRADEMARKS
- 11.1 Use of Marks. Subject to Section 11.5, the Franchised Business shall be named "Angry Chickz". Franchisee shall use and display Company's trade dress, Marks, and such signs, advertising and slogans only as Company may prescribe or approve. Franchisee will: (i) maintain the highest standard of quality in the provision, operation, promotion, marketing and advertising of all products and services; (ii) provide high quality services to the public similar, and at least equal to, the type, quality, and distinguishing characteristics of the services being offered by Company and its Affiliates; and (iii) display the Marks in accordance with the Standards. Upon expiration or sooner termination (including nonrenewal) of this Agreement, Company may execute in Franchisee's name and on Franchisee's behalf, any and all documents necessary or appropriate to end and cause the discontinuance of Franchisee's use of the trade dress and Marks, and Company is hereby irrevocably appointed and designated as Franchisee's attorney-in-fact to do so. Franchisee shall not imprint or authorize any person to imprint any of the Marks on any product without the prior written approval of Company. Franchisee shall not use the Marks in connection with any assignment or offering of securities or any request for credit without the prior written approval of Company. Company may withhold or condition any approval related to the Marks. Franchisee shall identify the Franchised Business as independently owned and operated under a license from Company, in the form and manner specified by Company, including on all invoices, order forms, receipts, checks, business cards, on posted notices at the Franchised Business and in other media and advertisements. Company may withhold or condition any approval related to the Marks.
- 11.2 Non-Use of Trade Name. If Franchisee is an Entity, it shall not use Company's Marks, or Company's trade name, or any words or symbols which are confusingly similar, phonetically or visually, to the Marks, as all or part of Franchisee's name.
- 11.3 Non-ownership of Marks. Nothing in this Agreement shall give Franchisee, and Franchisee shall not assert, any right, title or interest in Company's trade dress, or to any of the Marks or the goodwill attributable to the Marks. Franchisee is granted only a license during the Term to display and use the Marks according to the terms and conditions of this Agreement. All goodwill accrued by, and due to, Franchisee's use of the Marks anywhere shall be the sole and exclusive property of Company.
11.4 Defense of Marks; Prosecution of Infringers.
11.4.1 If Franchisee receives notice, or is otherwise informed, of any claim, suit or demand against Franchisee of any alleged infringement, unfair competition or similar matter on account of its use of the Marks or trade dress, Franchisee shall promptly notify Company of the same. Company shall take such action as it may deem necessary and appropriate to protect and defend Franchisee against any such claim, but Company shall not be obligated to take any such action, however. Franchisee shall not settle or compromise any claim by a third party without the prior written consent of Company. Company shall have the sole right to defend, compromise or settle any claim, in its discretion, at Company's sole cost and expense, using attorneys of its own choosing.
- 11.4.2 If Franchisee receives notice or learns that any unauthorized third party is using Company's trade dress or Marks or something similar, Franchisee shall promptly notify Company. Company shall then determine whether or not it wishes to take any action against such third person. Franchisee shall have no right to make any demand against any alleged infringer or to prosecute any claim of any kind or nature whatsoever against any alleged infringer for or on account of such infringement.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, franchisees have specific rights and obligations regarding the use of Angry Chickz's trademarks and system. The franchisee's business must be named "Angry Chickz." Franchisees are required to use and display the company's trade dress, marks, signs, advertising, and slogans only as prescribed or approved by Angry Chickz. Franchisees must maintain high standards of quality in their products, services, and marketing, ensuring they match the quality offered by Angry Chickz and its affiliates, and display the marks according to the brand's standards. Franchisees must also identify their business as independently owned and operated under a license from Angry Chickz in all relevant media, including invoices and advertisements. However, Angry Chickz retains significant control over the use of its marks and trade dress.
Angry Chickz franchisees are granted a license to use the marks during the term of the agreement, but they do not acquire any ownership rights to the trademarks or associated goodwill. All goodwill generated through the franchisee's use of the marks accrues solely to the benefit of Angry Chickz. Franchisees are prohibited from contesting the validity of any mark or its registration and must actively protect the integrity of the marks to prevent dilution. They cannot use the marks in connection with any securities offerings or credit requests without prior written approval from Angry Chickz. Additionally, franchisees cannot display other trademarks without Angry Chickz's consent.
Angry Chickz retains the right to modify its marks and trade dress, and franchisees are obligated to implement these changes at their own expense, typically within 60 days of notice. Upon termination or expiration of the franchise agreement, franchisees must discontinue all use of the trade dress and marks, and Angry Chickz is authorized to execute documents on the franchisee's behalf to ensure compliance. Franchisees are also required to notify Angry Chickz of any potential infringement of the marks, but they have no right to independently pursue legal action against infringers. Angry Chickz will decide whether to take action against the third party. Franchisees must cooperate in protecting the marks, including signing documents necessary for litigation or proceedings.
These stipulations ensure that Angry Chickz maintains tight control over its brand identity and quality standards, which is typical in franchising. Prospective franchisees should understand that while they have the right to use the Angry Chickz marks to operate their business, this right is heavily regulated and subject to change. Failure to comply with these requirements can lead to termination of the franchise agreement, especially in cases of intellectual property misuse or actions that could impair the brand's goodwill. Franchisees should be aware of the restrictions on using the marks and the potential costs associated with implementing changes to branding elements.