Does the Alloy franchise agreement address rights under federal trademark laws?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO THE FRANCHISE AGREEMENT REQUIRED FOR MINNESOTA FRANCHISEES
This Addendum pertains to franchises sold in the State of Minnesota and is for the purpose of complying with Minnesota statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended as follows:
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- We will undertake the defense of any claim of infringement by third parties involving the ALLOY Trademark, and you will cooperate with the defense in any reasonable manner prescribed by us with any direct cost of such cooperation to be borne by us.
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- Minnesota law provides franchisees with certain termination and nonrenewal rights. As of the date of this Franchise Agreement, Minn. Stat. Sec. 80C.14, Subd. 3, 4 and 5 require, except in certain specified cases, that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for nonrenewal of the franchise agreement.
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- The following sentence is hereby added to the end of Section 9.A, Initial Franchise Fee:
Due to the financial condition of the Franchisor, the Minnesota Department of Commerce has required a financial assurance. Therefore, we have posted a surety bond which is on file with the State of Minnesota. A copy of the surety bond is attached as an exhibit to the Minnesota addenda pages.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the franchise agreement does address rights related to federal trademark laws, particularly for franchisees in Minnesota. Specifically, Alloy will undertake the defense of any claim of infringement by third parties involving the Alloy trademark, and the franchisee is required to cooperate with the defense in any reasonable manner prescribed by Alloy. Any direct cost of such cooperation will be borne by Alloy. This addendum is included to comply with Minnesota statutes and regulations.
Outside of Minnesota, the agreement specifies that Alloy retains all rights not expressly granted to the franchisee. Alloy and its affiliates can establish franchised, company-owned, or affiliate-owned facilities at any location, regardless of proximity to a franchisee's designated area. They can also engage in merger/acquisition activity with any businesses, even those in competition with Alloy, and these businesses may convert to or operate under Alloy's trademarks. Furthermore, Alloy can sell and distribute services and products, the same as or different from those offered under the Alloy system, through any distribution channels or methods, including the internet.
The Alloy franchise agreement also defines key terms related to the brand's intellectual property. The "System" is defined as the Alloy System, which includes specific equipment, methods, standards, and procedures for operations, training, and advertising programs. This system is identified by the Trademarks. "Trademarks" are defined as the Alloy trademark and service mark registered in the United States and elsewhere, as well as other trademarks, service marks, trade names, trade dress, and commercial symbols authorized for use in the operation of the facility. These trademarks may be modified and updated from time to time by Alloy.
Upon termination or expiration of the franchise agreement, all rights granted to the franchisee automatically terminate. The franchisee must cease operating the business under the agreement and cannot represent themselves as a present or former developer of Alloy, except in connection with existing facilities operating under a valid franchise agreement. The franchisee must also take necessary actions to cancel or assign to Alloy any assumed name registrations containing the Alloy name or trademarks. Additionally, the franchisee must assign their rights to telephone numbers and notify the telephone company of the termination of their right to use any telephone number associated with the trademarks.