Besides the transfer fee, what other costs are associated with transferring an Alloy franchise in the event of insolvency?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
nt requirements for our ALLOY franchise program we are offering at the time of the proposed transfer and sign our then-current form of franchise agreement modified to reflect the term remaining under this Agreement.
-
- Payment of Amounts Owed. All amounts owed by you to us, or any of our affiliates, your suppliers or any landlord for the Facility premises and Facility, or upon which we or any of our affiliates have any contingent liability must be paid in full.
-
- Reports. You must have provided all required reports to us in accordance with subparagraphs 9.H and I.
-
- Modernization. You must have complied with the provisions of subparagraph 5.E.
-
- Guarantee.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if you are insolvent and wish to transfer your franchise, you must first pay all outstanding debts to Alloy, its affiliates, your suppliers, and your landlord. This includes any amounts for which Alloy or its affiliates have a contingent liability. Additionally, you must have submitted all required reports to Alloy as outlined in subparagraphs 9.H and I of the franchise agreement, and you must have met the modernization requirements detailed in subparagraph 5.E.
In the event of a transfer, the assignee (the new franchisee) must meet all of Alloy's current requirements for franchisees at the time of the proposed transfer. This includes signing Alloy's current franchise agreement, modified to reflect the remaining term of the original agreement.
It's important to note that in California, the termination of the franchise agreement due to insolvency or bankruptcy may not be enforceable under federal law. Prospective franchisees should consult with legal counsel to fully understand their rights and obligations in the event of insolvency and franchise transfer.