What agreement might a secured party be required to execute regarding an Alloy franchise?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
of first refusal provided for in subparagraph 11.F must be made by submission of our form of application for consent to transfer, which must be accompanied by the documents we request and other required information. The application must indicate whether you or an Owner proposes to retain a security interest in the property to be transferred. No security interest may be retained or created, however, without our prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer will be subject to our prior written approval, which approval will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to the 2025 Alloy Franchise Disclosure Document, if a franchisee or owner proposes to retain a security interest in the property to be transferred, Alloy requires that the application indicate this. However, no security interest can be retained or created without Alloy's prior written consent and only upon conditions that are acceptable to them.
Any agreement used during a transfer is subject to Alloy's prior written approval, which, according to the FDD, will not be unreasonably withheld. The franchisee must immediately notify Alloy of any proposed transfer and promptly submit the application for consent to transfer, along with any other required documents and information.
It is important for potential Alloy franchisees to understand that failure to obtain prior written consent from Alloy or non-compliance with the terms of the agreement will render any attempted transfer void. In such cases, the franchisee's interest in the agreement will be considered voluntarily abandoned, giving Alloy the right to either deem the franchisee in default and terminate the agreement or collect a transfer fee equal to two times the standard transfer fee, which is normally $10,000.