Is the 'ACKNOWLEDGEMENT OF PRINCIPAL' section for the Alloy franchise agreement required to be completed before signing the agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The Acknowledgment Addendum attached to the Area Development Agreement (and specifically stating that it is not for use in the State of Illinois) is unenforceable under Illinois law because it may have the effect of forcing a franchisee to waive or release certain rights that you as a franchisee have under the Illinois Franchise Disclosure Act, 815 IL § 705.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
Based on the 2025 Alloy Franchise Disclosure Document, there is no mention of an "ACKNOWLEDGEMENT OF PRINCIPAL" section within the provided excerpts. However, the Illinois Addendum to the Area Development Agreement includes a statement regarding an "Acknowledgment Addendum" attached to the Area Development Agreement, specifying that it is not for use in Illinois. It states that this addendum is unenforceable under Illinois law because it may force a franchisee to waive certain rights under the Illinois Franchise Disclosure Act.
Because the provided excerpts do not contain information about an "ACKNOWLEDGEMENT OF PRINCIPAL" section, it is not possible to determine whether it is required to be completed before signing the agreement. The Illinois addendum suggests that certain acknowledgments may be problematic or unenforceable in some states.
A prospective Alloy franchisee should ask the franchisor directly about the "ACKNOWLEDGEMENT OF PRINCIPAL" section, specifically requesting a copy of the section and clarification on whether it is required, and its implications for the franchisee's rights and obligations, especially in their specific state. It would also be prudent to consult with a franchise attorney to review all documents before signing.