Does the Ledgers Franchise Agreement require Ledgers to participate in a franchisee's defense in a trademark proceeding?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
If you learn of any claim against you for alleged infringement, unfair competition, or similar claims about the Marks, you must promptly notify us. We are not required to take affirmative action when notified of these uses or claims.
We have the sole right to control any administrative proceedings or litigation involving a trademark licensed by us to you. The Franchise Agreement does not require us to participate in your defense or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving a trademark licensed by us to you or if the proceeding is resolved unfavorably to you.
If we discontinue or modify our Marks, you must adopt and use any new Marks as required by us. Any expenses you incur because of adopting and using these Marks are your responsibility.
Source: Item 13 — TRADEMARKS (FDD pages 34–36)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, Ledgers is not obligated to participate in a franchisee's defense in a trademark proceeding. The FDD clearly states that Ledgers is not required to take affirmative action if a franchisee notifies them of claims regarding infringement or unfair competition related to the Marks.
Specifically, the Franchise Agreement does not require Ledgers to participate in a franchisee's defense or to cover expenses or damages if the franchisee is involved in an administrative or judicial proceeding concerning a licensed trademark, even if the outcome is unfavorable for the franchisee. This means that if a franchisee faces a trademark dispute, they will likely be responsible for their own legal defense and any associated costs.
This is a crucial point for potential Ledgers franchisees to consider. While Ledgers retains the sole right to control any administrative proceedings or litigation involving a trademark licensed to the franchisee, they are not obligated to provide support or financial assistance to the franchisee in such cases. Franchisees should be prepared to handle trademark-related legal challenges independently, which may involve significant expenses. It is advisable to seek legal counsel to understand the full scope of potential trademark liabilities and to explore options for insurance or other risk mitigation strategies.
Furthermore, Ledgers reserves the right to modify the marks used in connection with the franchised business, and any expenses incurred by the franchisee due to adopting these new marks are the franchisee's responsibility. This underscores the importance of understanding the potential costs and risks associated with trademark usage and protection within the Ledgers franchise system.