Can the arbitrator declare any of Chicken Guy's Proprietary Marks generic or otherwise invalid?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) The arbitrator will have the right to award or include in the award any relief which the arbitrator deems proper under the circumstances, including, without limitation, money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and reasonable attorneys' fees and costs, provided that the arbitrator will not have the right to amend or modify the terms of this Agreement, declare any Proprietary Marks generic or otherwise invalid, or award any punitive or exemplary damages against either party (Chicken Guy and Franchisee hereby waiving to the fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the other).
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the arbitrator in any dispute resolution is explicitly prohibited from declaring any of Chicken Guy's proprietary marks as generic or invalid. This protects Chicken Guy's brand identity and trademarks. The arbitrator's powers are generally defined, allowing them to award damages, specific performance, injunctive relief, and reasonable attorney's fees, but this specific restriction is in place to safeguard the brand's intellectual property.
This provision is significant for prospective franchisees because it underscores the importance of Chicken Guy's trademarks and the company's commitment to protecting them. Franchisees are also prohibited from contesting the validity or ownership of the Proprietary Marks. This clause ensures that any disputes will not jeopardize the brand's trademarks.
This restriction on the arbitrator's power is not uncommon in franchising, as franchisors typically want to maintain strict control over their brand and trademarks. Franchisees must recognize that they cannot challenge the validity of the Chicken Guy trademarks through arbitration. Any unauthorized use of the Proprietary Marks by Franchisee or attempt by Franchisee, directly or indirectly, to register the Proprietary Marks in any jurisdiction shall constitute a breach of this Agreement and an infringement of Chicken Guy's rights in and to the Proprietary Marks.
Overall, this clause reinforces the franchisee's obligation to respect and protect Chicken Guy's proprietary marks and ensures that the brand's trademarks cannot be challenged or invalidated through arbitration.