I am making some logos that are to go on the side of a round cake. The logos are only three colors (red, white and blue). I am cutting out the basic shape in white fondant and then going to color the other two colors in either edible markers or gel paste color. Each logo is about 2 x 3 inches and there are 3 of them.

Is there a better way of coloring them? If I choose the gel color will it make the fondant turn mushy?

you should mix the gel color with alcohol with a high proof content (not rubbing alcohol, but the kind you can drink). everclear is usually recommended but if you cannot find it you can use vodka.