Does Alloy have the obligation to take action against infringement of the Alloy Trademarks?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
In the event of any litigation relating to your use of the Trademarks, you must sign any and all documents and do the acts as may, in our opinion, be necessary to carry out the defense or prosecution, including becoming a nominal party to any legal action, and we or our Affiliate will reimburse you for your out-of-pocket costs in doing these acts except if this litigation is the result of your use of the Trademarks in a manner inconsistent with the terms of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to the 2025 FDD, Alloy has the right, but not the obligation, to take action against the infringement of its trademarks. However, if a franchisee becomes aware of any improper use or infringement of the Alloy trademarks, they must promptly notify Alloy. Alloy, or its affiliate, has the sole right to direct and control any administrative proceeding or litigation involving the trademarks, including any settlement.
If a third party brings a claim against an Alloy franchisee for their use of the trademarks, Alloy or its affiliate may defend the franchisee. If Alloy determines that the franchisee has used the trademarks according to the franchise agreement, Alloy or its affiliate will bear the cost of the defense, including any judgment or settlement costs. However, if Alloy determines that the franchisee has not used the trademarks according to the agreement, the franchisee will be responsible for these costs.
In the event of litigation related to the use of Alloy's trademarks, the franchisee must sign documents and perform acts necessary for the defense or prosecution, including becoming a nominal party to any legal action. Alloy or its affiliate will reimburse the franchisee for out-of-pocket costs, unless the litigation results from the franchisee's use of the trademarks in a manner inconsistent with the terms of the agreement. This is a fairly typical arrangement in franchising, where the franchisor retains control over the brand's legal protection but requires franchisee cooperation.