If ADQ requires changes to the trademarks for Dq Treat, who bears the expense of these changes?

According to Dq Treat's 2025 Franchise Disclosure Document, if ADQ (American Dairy Queen) determines that a claim regarding trademark rights necessitates changes or substitutions to the trademarks, the franchisee is responsible for bearing the expense of these changes. This means that if a third party asserts a superior claim to the trademarks used by Dq Treat, and ADQ requires franchisees to modify or replace those trademarks as a result, the franchisee must pay for the associated costs.

This stipulation places a financial risk on the Dq Treat franchisee. Trademark disputes can arise unexpectedly, and the costs associated with rebranding, such as new signage, marketing materials, and other related expenses, can be significant. The franchisee has no recourse under the franchise agreement to seek compensation from ADQ for these expenses, nor do they have any rights if ADQ requires them to stop using a trademark altogether.

In the franchise industry, it is not uncommon for franchisees to bear the costs of changes to trademarks or branding, as they are the ones directly using the marks in their business operations. However, prospective Dq Treat franchisees should carefully consider this potential expense and factor it into their financial planning. It would be prudent to inquire with ADQ about any known or potential trademark disputes and to understand the potential costs associated with rebranding in the event of a required change.