According to the Alloy FDD, who does a franchise broker represent?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving
any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to the 2025 Alloy Franchise Disclosure Document, a broker or other person acts on behalf of Alloy, the franchisor. This means that any statements or information provided by a broker are considered to be representations made by Alloy.
This is particularly relevant in the context of potential fraud claims. The FDD stipulates that no statement signed by a franchisee can waive their right to claim fraud in the inducement, whether based on common law or statutes. This protection extends to reliance on information provided by Alloy, a broker, or anyone acting on Alloy's behalf, if that information was a material factor in the franchisee's decision to invest.
For a prospective Alloy franchisee, this means that they can rely on the information provided by brokers during the franchise sales process. If that information turns out to be false or misleading and induces them to invest, they retain the right to pursue a claim of fraud. This clause aims to protect franchisees from misrepresentations made during the sales process and ensures they are not forced to waive their legal rights.