What is the Alloy franchisee's obligation regarding notification of trademark infringement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event any person or entity improperly uses or infringes the Trademarks or challenges your use or our use or ownership of the Trademarks, you must promptly notify us of any such use or infringement of which you are aware or any challenge or claim arising out of your use of any Trademark.
We or our Affiliate have the sole right to direct and control any administrative proceeding or litigation involving the Trademarks, including any settlement.
We or our Affiliate have the right, but not the obligation, to take action against uses by others that may constitute infringement of the Trademarks.
We or our Affiliate may defend you against any thirdparty claim, suit or demand arising out of your use of the Trademarks.
If we or our Affiliate determine that you have used the Trademarks in accordance with this Agreement, the cost of the defense, including the cost of any judgment or settlement, will be borne by us or our Affiliate.
If we or our Affiliate determine that you have not used the Trademarks in accordance with this Agreement, the cost of the defense, including the cost of any judgment or settlement, will be yours.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees have a responsibility to promptly inform Alloy of any potential trademark infringements or challenges. Specifically, if a franchisee becomes aware of any unauthorized use or infringement of the Alloy trademarks, or if there's a challenge to the franchisee's, or Alloy's, use or ownership of the trademarks, they must notify Alloy immediately. This obligation ensures that Alloy can take appropriate action to protect its brand and intellectual property.
Alloy, or its affiliate, retains the exclusive right to manage and control any administrative or legal proceedings related to the trademarks, including settlements. While Alloy has the right, it is not obligated, to take action against others who may be infringing on the trademarks. This means that Alloy ultimately decides whether to pursue legal action to protect its trademarks.
Furthermore, Alloy, or its affiliate, has the option to defend the franchisee against any third-party claims, suits, or demands arising from the franchisee's use of the trademarks. If Alloy determines that the franchisee has used the trademarks in accordance with the franchise agreement, Alloy will bear the costs of the defense, including any judgments or settlements. However, if Alloy determines that the franchisee has not adhered to the agreement's terms regarding trademark use, the franchisee will be responsible for these costs. This allocation of responsibility highlights the importance of franchisees adhering to Alloy's guidelines for trademark usage to avoid potential financial liabilities.