What might happen if Fat Shack's right to use unregistered trademarks is challenged?

According to Fat Shack's 2025 Franchise Disclosure Document, Fat Shack claims common law service or trademark rights to a number of other words, phrases, or designs that franchisees may use, including names of "Fat" sandwiches and the tagline, "Burgers, Wings, Fat Sandwiches." These unregistered trademarks do not have as many legal benefits and rights as federally registered trademarks. If Fat Shack's right to use these unregistered trademarks is challenged, franchisees may have to change to an alternative trademark, which may increase their expenses. This means a Fat Shack franchisee could incur unexpected costs to rebrand certain menu items or marketing materials if a trademark dispute arises over unregistered elements.

This situation highlights the importance of understanding the scope of trademark protection provided by a franchisor. While Fat Shack has registered trademarks like "FAT SHACK" and "LATE NIGHT DONE RIGHT", the lack of registration for other marks creates a potential risk for franchisees. It is fairly common for franchises to utilize both registered and unregistered trademarks, but the FDD clearly spells out the implications of using unregistered marks.

Prospective Fat Shack franchisees should carefully consider this risk and factor in potential rebranding expenses when evaluating the franchise opportunity. It would be prudent to inquire with Fat Shack about the history of these unregistered marks, any prior challenges to their use, and the process for selecting and implementing alternative trademarks if needed. Understanding the potential costs and procedures involved in such a scenario is crucial for making an informed investment decision.