Is the Fat Shack franchisee entitled to additional compensation for assigning proprietary rights to FSI for copyrightable works?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
All copyrightable works created by Franchisee or any of its owners, officers or employees in connection with the FAT SHACK Restaurant shall be the sole property of FSI. Franchisee assigns all proprietary rights, including copyrights, in these works to FSI without additional consideration. Franchisee hereby assigns and will execute such additional assignments or documentation to effectuate the assignment of all intellectual property, inventions, copyrights and trade secrets developed in part or in whole in relation to the FAT SHACK Restaurant, during the term of this Agreement, as FSI may deem necessary in order to enable it, at its expense, to apply for, prosecute and obtain copyrights, patents or other proprietary rights in the United States and in foreign countries or in order to transfer to FSI all right, title, and interest in said property. Franchisee shall promptly disclose to FSI all inventions, discoveries, improvements, creations, patents, copyrights, trademarks and confidential information relating to the FAT SHACK Restaurant which it or any of its owners, officers or employees has made or may make solely, jointly or commonly with others and shall promptly create a written record of the same. In addition to the foregoing, Franchisee acknowledges and agrees that any improvements or modifications, whether or not copyrightable, directly or indirectly related to the FAT SHACK Restaurant, shall be deemed to be a part of the Licensed Methods and shall inure to the benefit of FSI.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, any copyrightable works created by a franchisee or their employees in connection with the Fat Shack restaurant become the sole property of FSI. The franchisee is required to assign all proprietary rights, including copyrights, to FSI without receiving any additional compensation. This includes executing any additional assignments or documentation necessary to transfer intellectual property, inventions, copyrights, and trade secrets developed during the term of the agreement. These assignments enable FSI to apply for and obtain copyrights, patents, or other proprietary rights.
This means that if a Fat Shack franchisee or their employees create any marketing materials, recipes, or other copyrightable content related to the restaurant, Fat Shack automatically owns those creations. The franchisee will not be paid extra for these creations, as the rights are assigned to Fat Shack as part of the franchise agreement. This also extends to any improvements or modifications made to the Fat Shack restaurant concept, which become part of the Licensed Methods and benefit FSI.
This clause ensures that Fat Shack maintains control over its brand and intellectual property. It prevents franchisees from independently profiting from creations related to the Fat Shack business without compensating the franchisor. Prospective franchisees should be aware that any creative work they produce for the Fat Shack restaurant becomes the property of FSI without additional compensation.