Must the Commissioner of Commerce receive written notice from the Surety for cancellation of the Alloy bond to be effective?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Bond may also be cancelled by the Surety upon 30 days written notice by registered mail to the Principal and to the Securities Division. At the end of the 30 day period, the Bond shall be deemed cancelled except as to liabilities of the Principal arising prior to the date of cancellation. The notice of cancellation shall be deemed effective and the 30 day period shall begin to run upon
FRANCHISOR SURETY BOND Page 1 of 3 Revised April 22, 2010
receipt by the Securities Division of said notice and sufficient proof of receipt of said notice by the Principal.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the effectiveness of a surety bond cancellation is contingent upon the Securities Division's receipt of written notice. Specifically, the surety can cancel the bond with 30 days' written notice sent via registered mail to both Alloy and the Securities Division.
The cancellation notice is deemed effective only upon the Securities Division's receipt of the notice and sufficient proof that Alloy also received the notice. This ensures that the relevant regulatory body is informed and can take appropriate action, and that Alloy is aware of the impending cancellation, allowing them time to address any issues or find alternative financial assurances if necessary.
This requirement protects both the franchisee and the regulatory body. It ensures transparency and provides a safeguard against abrupt cancellations that could leave franchisees vulnerable. Prospective Alloy franchisees should confirm with the franchisor whether the Minnesota Department of Commerce is the specific regulatory body involved in their case.