Footwear Franchisor Sues Former Franchisee for Continued Use of Intellectual Property

Flip Flop Shops LLC, the 82-unit retail franchise based in Citrus-Heights, California, is suing a former franchisee for its alleged continued use of intellectual property.

The former Flip Flop Shops franchisee, Flopz LLC, has rebranded its retail location under the name 30A Sandals. However, the suit claims that by continuing to use the Flip Flop Shops trade name and trademarks, Flopz LLC has breached its contract with its former franchisor.

In an emailed statement to the Sacramento Business Journal, John Richey, Flip Flop Shops’ general counsel and chief legal officer, wrote that the suit is a consequence of “making sure everyone is operating on a level playing field and respecting each other’s obligations and rights.”

“We take our obligations to our franchisees very seriously,” Richey said. “In return, we expect our franchisees to honor their commitments and agreements and not take actions that could jeopardize the system and other franchisees within it.”

Flip Flop Shops also claims that Flopz LLC continues to utilize trade secrets associated with opening and operating a footwear business.

The lawsuit, filed in Sacramento County Superior Court last month, highlights the importance of abiding by agreements established within a franchise agreement. Any breach of this agreement could result in significant legal ramifications. 

Though the suit doesn’t mention an amount of compensation, Flip Flop Shops claims that the brand’s continued use of its name and trademarks is worth more than $1 million.