West Valley City, UT asked in Business Formation for Utah

Q: I have a simple business question:

I live in the state of Utah. My father owns an online store called the root beer store. My mother made him close is 5 locations and only operate online. I wish to open up a location and add pizza. With my OWN LLC, insurance, lease agreement, website, etc... everything separate I would like to call mine The Root Beer Store Ice Cream & Pizzeria. If by chance I get sued, could my father's online store (separate website from mine) also get sued?

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1 Lawyer Answer
Wesley Winsor
Wesley Winsor
PREMIUM
Answered
  • Saint George, UT
  • Licensed in Utah

A: Hi,

Sounds like a great place to eat. If the only thing you share is the recipe for the rootbeer, your father has nothing to worry about.

I would imagine that you will want to capitalize on some of the brand awareness that your father has. I would set up a licensing agreement between the both of you giving you a right to sell the rootbeer from his proprietary recipe and license to market it as "Root Beer Store" root beer. If you do that, then that would be the extent of your relationship. If don't do that and he just says, sure go ahead and use the stuff outsiders may think that he his a part of the business.

Bottom line is, anyone can sue anyone. Whether your father will have actual liability for your operation or foibles is very dubious, but that won't stop some jerk from putting his name on the lawsuit, just because and your father will probably have to pay legal fees to prove that he has nothing to do with it. Most attorneys aren't looking to waste other people's time and money just because they can and the burden would be on them to prove that there is a connection.

I hope this helps. Create an LLC for your store, set up an licensing agreement between your LLC and your Dad's and best of luck moving forward.

I hope this helps.

Wes

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