What are the potential consequences if Alloy's right to use the pending trademarks is challenged?

According to Alloy's 2025 Franchise Disclosure Document, Alloy does not have a federal registration for the trademarks STRONGER TOGETHER, ALLOY YELLOW LOGO, and ALLOY YELLOW WORDMARK. Because these trademarks do not have federal registration, they do not have as many legal benefits and rights as a federally registered trademark. If Alloy's right to use these trademarks is challenged, a franchisee may have to change to an alternative trademark. This change may increase the franchisee's expenses.

It is important to note that an application for registration on the Principal Register of the United States Patent and Trademark Office has been filed for these trademarks. This means that Alloy is in the process of obtaining federal registration for these trademarks, which would provide them with greater legal protection. However, until the trademarks are registered, there is a risk that Alloy's right to use them could be challenged.

In the event of any litigation relating to a franchisee's use of the Proprietary Marks, the franchisee must sign any and all documents and do the acts as may, in Alloy's opinion, be necessary to carry out the defense or prosecution, including becoming a nominal party to any legal action. Except if this litigation is the result of the franchisee's use of the Proprietary Marks in a manner inconsistent with the terms of the Franchise Agreement, Alloy will reimburse the franchisee for their out-of-pocket costs in doing these acts.

Alloy also reserves the right to substitute different Proprietary Marks for use in identifying the System and the businesses operating under the Proprietary Marks, at its sole discretion. The franchisee must implement any changed or substituted Proprietary Mark at their own expense and with no right to object to the change.