What must a Chatime Developer do if there is a potential threat of infringement with respect to the Intellectual Property?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
9.4 Protection of Intellectual Property
- (1) Developer must:
- (a) Provide all reasonable assistance to Franchisor to register and enforce Franchisor's intellectual property rights in the Development Area;
- (b) Take all reasonable steps to protect the Intellectual Property against any action or infringement by any person;
- (c) Immediately notify Franchisor of any actual or potential threat or claim of infringement with respect to the Intellectual Property.
- (2) Franchisor, at its absolute discretion, will determine whether to commence or defend legal proceedings relating to the Intellectual Property.
(3) Payment of all Costs incurred in commencing or defending legal proceedings relating to the Intellectual Property will be made by Franchisor, provided that Franchisor has authorized the taking of any such action.
(4) Developer must co-operate fully with Franchisor in relation to any actions conducted under this clause 9.4 and must not bring any actions itself relating to the Intellectual Property.
(5) Save for remittance of Costs under clause 9.4(3) (if any), Franchisor will be entitled to receive the proceeds of all actions conducted under this clause 9.4.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, a Developer plays a crucial role in safeguarding the brand's intellectual property within their designated Development Area. If a Developer identifies any actual or potential threat or claim of infringement related to Chatime's Intellectual Property, they are obligated to immediately inform Chatime. This proactive notification allows Chatime to take appropriate action to protect its brand and assets.
Chatime retains full authority to decide whether to initiate or defend any legal proceedings concerning its Intellectual Property. If Chatime authorizes any such action, the company will cover all associated costs. The Developer is required to fully cooperate with Chatime in any actions taken to protect the Intellectual Property and is prohibited from independently pursuing any legal actions related to it.
Any proceeds resulting from legal actions taken by Chatime to protect its Intellectual Property will be retained by Chatime, except for any cost reimbursements made to the Developer. This framework ensures that Chatime maintains control over its brand and legal strategy, while also requiring the Developer to actively participate in protecting the brand's interests within their territory.