What is the Fat Shack franchisee's obligation in the event of litigation related to the franchisor's copyrighted materials?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to notify FSI in writing of any possible infringement or illegal use by others of a trademark the same as or confusingly similar to the Marks which may come to its attention. Franchisee acknowledges that FSI shall have the right, in its sole discretion, to determine whether any action will be taken in response to any possible infringement or illegal use and agrees to fully cooperate with FSI in any such litigation or other action.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 40–41)
What This Means (2025 FDD)
According to the 2025 Fat Shack Franchise Disclosure Document, if a franchisee becomes aware of potential trademark infringement related to Fat Shack's marks, the franchisee must notify Fat Shack in writing. Fat Shack then has the sole discretion to decide whether or not to take action against the infringement. The franchisee is obligated to fully cooperate with Fat Shack in any litigation or other action that Fat Shack decides to pursue. This means the franchisee must provide any information or assistance that Fat Shack requests in connection with the legal proceedings.
This obligation ensures that Fat Shack can protect its brand and trademarks effectively. By requiring franchisees to report potential infringements and cooperate with legal action, Fat Shack aims to maintain control over its intellectual property and prevent unauthorized use of its trademarks. The franchisee's role is primarily to act as an informant and supporter in any legal efforts initiated by Fat Shack.
For a prospective Fat Shack franchisee, this means being vigilant about potential trademark infringements and promptly reporting them to Fat Shack. It also means being prepared to assist Fat Shack with any legal action, which could involve providing documents, testimony, or other forms of support. While Fat Shack retains control over the legal strategy, the franchisee's cooperation is essential for a successful outcome. Failure to report or cooperate could potentially lead to breaches of the franchise agreement.