Who bears the cost of Alloy's legal counsel if Alloy chooses its own counsel for a Franchise Claim?

According to Alloy's 2025 Franchise Disclosure Document, if a franchise claim is made against Alloy or its affiliates, Alloy reserves the right to select its own legal counsel to represent its interests. The franchisee is responsible for covering the costs of this legal representation.

This means that if a customer or employee sues Alloy and/or the franchisee, Alloy can choose its own lawyers, but the franchisee will have to pay Alloy's legal bills in addition to their own legal costs for defending against the claim. Franchise Claims include, but are not limited to, those arising from any death, personal injury or property damage (whether caused wholly or in part through our or our affiliates' active or passive negligence), latent or other defects in any Facility, or your employment practices.

This arrangement could create a significant financial burden for the franchisee, especially if the legal proceedings are lengthy or complex. It is important for prospective franchisees to understand this potential liability and factor it into their financial planning. Franchisees should ensure they have adequate insurance coverage to protect against such claims and consider seeking legal advice to fully understand their obligations under the franchise agreement.