Is Alloy allowed to develop or franchise Special Site locations?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ough any distribution channels or methods, without compensation to any franchisee. The distribution channels or methods ("Alternative Methods of Distribution") include, without limitation, the internet (or any other existing or future form of electronic commerce).
You acknowledge and agree that certain locations within the Development Territory are by their nature unique and separate in character from sites generally developed as facilities. As a result, you agree that the following captive market locations ("Special Sites") are excluded from the Development Territory and we have the right to develop or franchise such locations: (1) military bases; (2) public transportation facilities (including airports); (3) business or industry locations (e.g. manufacturing site, office building), or sports facilities; (4) student unions or other similar buildings on college or university campuses; (5) malls or enclosed shopping centers; and (6) community and special events.
E. This Agreement is not a Franchise Agreement, and you have no right to use in any manner the Trademarks or operate an ALLOY facility by virtue of this Agreement. You have no right under this Agreement to sublicense or subfranchise others to operate a business or facility or use the System or the Trademarks.
DEVELOPMENT FEE
-
- Simultaneously with the execution of this Agreement, you must pay a Development Fee as described below:
- A. As consideration for the rights granted in this Agreement, you must pay us a "Development Fee" in the amount designated on the Data Sheet. The Development Fee is consideration for this Agreement and not consideration for any Franchise Agreement, is fully earned by us upon receipt and is nonrefundable.
- B.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy retains the right to develop or franchise Special Site locations, which are defined as unique locations separate from typical Alloy facilities. These Special Sites include military bases, public transportation facilities like airports, business or industry locations such as manufacturing sites or office buildings, sports facilities, student unions or similar buildings on college campuses, malls or enclosed shopping centers, and community and special events. This right applies regardless of the location or proximity to a franchisee's existing facility.
This means that even if a franchisee has a protected territory, Alloy can still establish or franchise Alloy locations within these Special Sites inside or outside the Development Territory. This could potentially lead to competition for the franchisee, as Alloy can operate or allow others to operate Alloy facilities in these non-traditional locations.
For a prospective franchisee, this is an important consideration. While a franchisee may have certain territorial rights, these rights do not extend to Special Sites. Therefore, it is crucial to understand the potential impact of these exceptions on the franchisee's business and market. A prospective franchisee should inquire about Alloy's plans for developing or franchising Special Sites in their target market to assess the potential for competition from these alternative locations.