Is Ledgers required to take affirmative action if notified of trademark infringement claims against a franchisee?

According to Ledgers's 2025 Franchise Disclosure Document, Ledgers is not required to take affirmative action if notified of trademark infringement claims against a franchisee. The FDD states that if a franchisee learns of any claim against them for alleged infringement, unfair competition, or similar claims about the Marks, the franchisee must promptly notify Ledgers. However, Ledgers is not required to take affirmative action when notified of these uses or claims.

Ledgers retains the sole right to control any administrative proceedings or litigation involving a trademark licensed by them to the franchisee. The Franchise Agreement does not require Ledgers to participate in the franchisee's defense or indemnify them for expenses or damages if the franchisee is a party to an administrative or judicial proceeding involving a trademark licensed by Ledgers, or if the proceeding is resolved unfavorably to the franchisee.

This means that if a Ledgers franchisee is sued for trademark infringement, they must inform Ledgers, but Ledgers is not obligated to take any action to defend the franchisee. The franchisee will likely be responsible for their own legal defense costs and any damages awarded against them. This is a significant risk for franchisees, as trademark litigation can be expensive and time-consuming. It is important for prospective franchisees to understand this risk and to consider purchasing insurance to protect themselves against potential trademark infringement claims.