Who has the right to control administrative proceedings or litigation involving a Ledgers trademark?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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 retains the sole right to control any administrative proceedings or litigation involving a trademark licensed to its franchisees. This means that if any legal issues arise concerning the trademarks that Ledgers licenses to its franchisees, Ledgers, not the franchisee, will manage the legal process.
This arrangement has significant implications for prospective Ledgers franchisees. While franchisees are required to promptly notify Ledgers of any claims against them for alleged infringement, unfair competition, or similar claims about the Marks, Ledgers is not obligated to take any action. Furthermore, 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 involved in an administrative or judicial proceeding related to a licensed trademark. This places the responsibility and potential financial burden of defending against such claims solely on the franchisee, even though Ledgers controls the legal proceedings.
This is a fairly typical arrangement in franchising, where the franchisor maintains control over its trademarks to ensure consistent brand management and quality control. However, it's crucial for prospective Ledgers franchisees to understand that they will likely bear the costs associated with defending against trademark-related claims, even if Ledgers directs the legal strategy. Franchisees should factor in potential legal expenses when assessing the overall financial viability of the franchise. It would be prudent for a prospective franchisee to discuss with Ledgers what support or guidance they might offer in such situations, even if not legally obligated, and to consider obtaining appropriate insurance coverage.