How is compliance with the Alloy Development Schedule determined, specifically regarding which facilities are counted?

According to Alloy's 2025 Franchise Disclosure Document, compliance with the Development Schedule is based on the number of Alloy facilities that are actually open and continuously operating for business in the Development Territory as of a specific date. Only those facilities meeting this criterion are counted towards fulfilling the required number of open facilities.

This means that for an area developer, simply signing franchise agreements or having facilities under construction does not count toward meeting the development obligations. The Alloy franchisee must ensure that the facilities are fully operational and continuously running to be considered compliant with the development schedule outlined in the Area Development Agreement.

The Development Schedule itself, as detailed in Appendix B of the Area Development Agreement, specifies the dates by which a certain number of Alloy facilities must be open and continuously operating. For example, the table shows the franchisee must have one facility open within one year of the agreement's effective date. The agreement also specifies the dates by which franchise agreements must be signed for subsequent facilities.

This emphasis on operational facilities has significant implications for Alloy area developers. It places the onus on the franchisee to not only secure locations and sign agreements but also to efficiently manage the build-out and launch phases to ensure timely openings and continuous operation. Failure to meet these operational deadlines could result in penalties or termination of the Area Development Agreement.