Can businesses acquired by Alloy offer training services similar to those offered at Alloy franchises?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Franchise Agreement, we (and any affiliates that we periodically might have) have the right:
- (1) to establish and operate, and grant rights to other franchise owners to establish and operate, Facilities or similar businesses at any locations outside your Designated Territory and on any terms and conditions we deem appropriate;
- (2) merge with, acquire or become associated with ("Merger/Acquisition Activity") any businesses or facilities of any kind (including those in competition with ALLOY) under other systems and/or marks, which businesses and facilities may convert to or operate under the Marks and may offer or sell training services or related products that are the same as or similar to the services or products offered at or from the Franchised Business, and which may be located anywhere;
- (3) to engage in any other business activities not expressly prohibited by the Franchise Agreement, both within and outside your Designated Territory, and
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 Alloy Franchise Disclosure Document, Alloy has the right to engage in Merger/Acquisition Activity with any businesses, including those in competition with Alloy. These acquired businesses may convert to or operate under Alloy's marks and may offer training services or related products that are the same as or similar to the services or products offered at Alloy franchises. These acquired businesses can be located anywhere.
This means that Alloy can acquire businesses that compete with its own franchisees and allow them to offer similar training services, potentially impacting a franchisee's market share and revenue. This is a standard practice in franchising, where franchisors seek to expand their brand presence and market reach through various means, including acquisitions.
As a prospective franchisee, it's important to understand that Alloy retains significant control over market expansion and competitive dynamics. While franchisees are granted a designated area, Alloy's ability to acquire competing businesses and offer similar services can create competition within or near a franchisee's territory. Therefore, franchisees should carefully evaluate the potential impact of such acquisitions on their business and revenue projections.