According to Alloy, what are franchise royalties related to?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
| Lease liabilities, net of current portion | $ 595,429 |
NOTE 7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Operating lease (continued)
Supplemental cash flow information related to leases for the years ended December 31, 2024 and 2023, was as follows:
| A – State Administrators/Agents for Service of Process | G – Financial Statements |
|---|---|
| B – Franchise Agreement | H – Form of General Release |
| C – Area Development Agreement | I – State Addenda |
| D – List of Franchisees | J – State Effective Dates |
| E – List of Franchisees Who Have Left the System | |
| F – Table of Contents of Operations Manual |
NOTE 8. RELATED-PARTY TRANSACTIONS
License agreement
On August 1, 2019, the Company entered into a perpetual, non-cancelable, royalty-free and non-exclusive license agreement with the Licensor for the use of the registered name "Alloy Personal Training" (the "license agreement"). Pursuant to the license agreement, the Company has acquired the right to sell Alloy Personal Training franchises and collect franchise fees, royalties and other fees from franchisees.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Alloy receives royalties and other fees from franchisees for the right to sell Alloy Personal Training franchises. Alloy entered into a perpetual, non-cancelable, royalty-free and non-exclusive license agreement with the Licensor for the use of the registered name "Alloy Personal Training".
Alloy also collects brand fund fees of 2% of franchisees' reported sales. These funds are designated solely for advertising and related expenses to benefit the franchisees. A portion of the funds may offset Alloy's administrative costs to administer the funds, at Alloy's discretion.
As of December 31, 2024, the funds collected but not yet spent on behalf of franchisees totaled $403,344, while the corresponding amount as of December 31, 2023, was $185,052. The FDD states that there were no funds expended on the franchisees' behalf but not yet received by Alloy for the years ended December 31, 2024, 2023 and 2022.