Is an Alloy franchisee allowed to contest Alloy's rights to the Trademarks during or after the term of the agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that the Trademarks are our Affiliate's property and we have licensed the use of the Trademarks to you and others.
You further acknowledge that your right to use the Trademarks is specifically conditioned upon the following:
- A.
Trademark Ownership.
The Trademarks are our Affiliate's valuable property, and our Affiliate is the owner of all right, title and interest in and to the Trademarks and all past, present or future goodwill of the Facility and of the business conducted at the Facility that is associated with or attributable to the Trademarks.
Your use of the Trademarks will inure to our Affiliate's benefit.
You may not, during or after the term of this Agreement, engage in any conduct directly or indirectly that would infringe upon, harm or contest our rights in any of the Trademarks or the goodwill associated with the Trademarks, including any use of the Trademarks in a derogatory, negative, or other inappropriate manner in any media, including but not limited to print or electronic media.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees are prohibited from contesting Alloy's trademark rights during or after the franchise agreement. Alloy's affiliate owns the trademarks, and Alloy licenses their use to franchisees. Franchisees acknowledge the affiliate's ownership and the value of the trademarks.
Specifically, franchisees cannot engage in any conduct that would infringe upon, harm, or contest Alloy's rights to the trademarks or the associated goodwill. This includes refraining from using the trademarks in a derogatory or inappropriate manner across any media platforms. The agreement emphasizes that any use of the trademarks by the franchisee benefits Alloy's affiliate.
This restriction is a standard practice in franchising, as the brand's trademarks represent significant value and goodwill. Allowing franchisees to contest these rights would undermine the entire franchise system. Alloy retains the sole right to manage any legal proceedings related to the trademarks, including infringement or challenges to their use. Franchisees are required to notify Alloy of any potential misuse or infringement of the trademarks.
If a franchisee's use of the trademarks leads to litigation, Alloy or its affiliate will cover the costs of defense if the franchisee has used the trademarks according to the agreement. However, the franchisee will bear the costs if the use was not in accordance with the agreement. Franchisees must also sign documents and perform acts necessary for the defense or prosecution of trademark-related litigation, with Alloy reimbursing out-of-pocket costs unless the litigation arises from the franchisee's misuse of the trademarks.