What is the Fat Shack franchisee's obligation regarding disclosing inventions, discoveries, or improvements related to the Fat Shack Restaurant to FSI?
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, franchisees have a responsibility to disclose any intellectual property developed related to the Fat Shack Restaurant. Specifically, this includes inventions, discoveries, improvements, creations, patents, copyrights, trademarks, and confidential information. This obligation extends to anything the franchisee, their owners, officers, or employees create, whether individually, jointly, or with others.
The franchisee must promptly inform FSI (Fat Shack International) of these developments and create a written record of them. This requirement ensures that Fat Shack can protect and potentially utilize any innovations or improvements for the benefit of the entire franchise system. The franchisee is also required to assign all proprietary rights, including copyrights, to FSI without additional compensation and execute any additional documents to facilitate the assignment of intellectual property.
This clause means that if a franchisee develops a new menu item, a more efficient kitchen layout, or any other improvement related to the Fat Shack business, they must disclose it to Fat Shack, and the rights to that innovation become the property of Fat Shack. This is a fairly standard practice in franchising, as it allows the franchisor to maintain consistency and control over the brand and operating methods. However, it's crucial for prospective franchisees to understand that they will not own the rights to any improvements they develop for the Fat Shack system during the term of their agreement.