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Fan fiction programs at public libraries

I wanted to host a fanfiction writing contest for my teen department, as we have a lot of teens who enjoy writing fanfiction about their favorite characters and fandom. However, I know fanfiction is always a little tricky.

The idea was to set rules and guidelines, such as:

“Respect for Source Material: If using established characters or settings, submissions should honor the original creator’s vision, themes, and tone.

Originality: Plagiarism will result in disqualification. All work must be the author’s own, with clear inspiration rather than direct copying from the source material.”

The prize would be a gift card that was sponsored, not purchased. We wanted to publish these works on a small, local scale—hosted on our blog or website. However, I am starting to think that using public-domain characters and literary works may be the safest option, especially considering they are minors. A secondary question about publishing in general: if they are minors, is parental consent required?