Under what condition will Face Foundrie reimburse a franchisee for out-of-pocket costs related to litigation involving the Marks?

According to Face Foundrie's 2025 Franchise Disclosure Document, Face Foundrie will reimburse a franchisee for out-of-pocket costs related to litigation involving the Marks if the litigation does not result from the franchisee's use of the Marks in a manner inconsistent with the terms of the Franchise Agreement. This means that as long as the franchisee is using the FACE FOUNDRIÉ trademarks correctly and according to the agreement, Face Foundrie will cover these costs.

This is a significant protection for franchisees. Trademark litigation can be expensive, and this clause ensures that franchisees are not financially burdened if they are sued for trademark infringement as long as they are following the rules. It also incentivizes franchisees to adhere to the Franchise Agreement and use the Marks as directed, knowing that they will be supported in case of a legal challenge.

However, it is crucial for prospective Face Foundrie franchisees to understand what constitutes "use of the Marks in a manner inconsistent with the terms of the Franchise Agreement." This could include using the trademarks in unauthorized ways, selling unapproved products or services under the Marks, or violating any other trademark-related provisions in the agreement. If a franchisee's misuse of the Marks leads to litigation, they will be responsible for all defense costs, judgments, and settlements. Therefore, franchisees must carefully review and comply with all trademark usage guidelines outlined in the Franchise Agreement and Operations Manual.