What steps must a Chatime franchisee take to protect the Intellectual Property against infringement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
11.4 Protection of Intellectual Property
- (1) Franchisee must:
- (a) Provide all reasonable assistance to Franchisor to register and enforce Franchisor's intellectual property rights in the Territory;
- (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) Franchisee must cooperate fully with Franchisor in relation to any actions conducted under this clause 11.4 and must not bring any actions itself relating to the Intellectual Property.
- (5) Save for remittance of Costs under clause 11.4(3) (if any), Franchisor will be entitled to receive the proceeds of all actions conducted under this clause 11.4.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding the protection of Chatime's intellectual property. Franchisees must provide reasonable assistance to Chatime in registering and enforcing its intellectual property rights within their territory. This may include providing information or documentation to support Chatime's efforts to secure and defend its trademarks, business names, and other proprietary assets.
Furthermore, Chatime franchisees are required to take reasonable steps to protect the intellectual property against any infringement or potential infringement by others. This could involve monitoring local markets for unauthorized use of the Chatime brand or logo, and taking action to prevent the sale of counterfeit products. Franchisees must also immediately notify Chatime of any actual or potential threats or claims of infringement related to the intellectual property. This ensures that Chatime is aware of any issues and can take appropriate action to protect its brand.
Chatime retains the sole discretion to decide whether to initiate or defend legal proceedings related to its intellectual property. The franchisor will cover the costs associated with these legal proceedings, provided that Chatime has authorized the action. Franchisees are obligated to fully cooperate with Chatime in any actions taken to protect the intellectual property and are prohibited from independently pursuing any legal actions related to the intellectual property. This coordinated approach ensures that Chatime maintains control over its brand and legal strategy, while franchisees support these efforts at the local level.