What is the condition for paying the Alloy renewal fee?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
penses to be paid include your attendees' |
| Name of Fee (1) | Amount | Date Due | Remarks | |
|---|---|---|---|---|
| travel, lodging, meals, and wages | ||||
| Insufficient Funds/Late Report Fee | $100 fee for late report/late payment, with fee increasing by $50 for each subsequent late report/late payment (up to a maximum of $250 for the fourth and any subsequent late report/late payment | On demand, if incurred | You must pay us this fee if there are not sufficient funds in your bank account to process payments owed to us and/or our affiliates or you are late in submitting reports. If you incur this fee three times in any 12 month period, we may terminate your Franchise Agreement without giving you the right to cure the default | |
| Interest on Overdue Amounts | 12% per annum or the highest legal contract rate, whichever is less | Upon billing | Payable on all overdue amounts. Interest accrues from the original due date until payment is received in full | |
| Audit | Cost of the audit (estimated to be between $1,000 and $5,000) | On demand | Payable only if the audit is conducted due to your failure to provide reports when required or if the audit shows you have understated any amount due to us (or Gross Sales) by 3% or more. You must also pay any understated amount plus interest | |
| Transfer Fee | $10,000 | Application fee is payable with request for approval of transfer. Transfer fee is payable when transfer is approved | No fee is imposed for a one time transfer to a corporate entity formed by you for the convenience of ownership or an instance where you have a Business and are adding an operating partner who will have a 20% or less ownership interest and we determine there is no change of control in the franchisee entity. | |
| Renewal | $5,000 | When the renewal Franchise Agreement is signed | ||
| Name of Fee (1) | Amount | Date Due | Remarks | |
| ----------------------------------------- | ------------------------------------------------------------------- | ------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- |
| Relocation Fee | $7,500 | With request for our approval of the relocation | Payable if you wish to relocate your Franchised Business | |
| Costs and Attorneys' Fees | Will vary under circumstances | As incurred | If you default under your agreement, you must reimburse us for the expenses we incur (such as attorneys' fees) in enforcing or terminating the agreement | |
| Indemnification | Will vary under circumstances | As incurred | You must reimburse us if we are held liable for claims arising from your Facility's operations or if you use the Proprietary Marks in an unauthorized manner | |
| Product or Supplier Evaluation | Reimbursement of our expenses, up to $5,000 per request | As incurred | If you request that we evaluate a new product or supplier for the System | |
| QuickBooks Online | $50 | Monthly | Payable to Quick Books Online. | |
| Proprietary Software | To be determined | To be determined | We reserve the right to develop proprietary software, in addition to the Alloy App, for use by all franchisees in the System. If we do this, we may charge you an initial fee for the software and a continuing maintenance fee | |
| Insurance | Reimbursement of our costs plus 10% administrative fee | On demand | If you do not maintain the insurance that we require, we may (but are not obligated to) purchase insurance for you | |
| Management Fee | 10% of Gross Sales, plus expenses | As incurred | We have the right to step in and manage your Franchised Business for you in certain circumstances, including your prolonged absence, death or disability. We will charge a management fee if we manage your Facility, and you must reimburse our expenses | |
| Name of Fee (1) | Amount | Date Due | Remarks | |
| ------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | |
| Refurbishment of Franchised Business | Will vary under the circumstances | As incurred | Payable to approved suppliers. You must regularly clean and maintain your Facility and its equipment. We may require you to remodel or redecorate your Facility to meet our then current image for all Alloy Facilities. We will not require you to remodel or redecorate your Facility more frequently than every five years. General refurbishment of your Facility is in addition to technology and equipment upgrades that we may require you to make | |
| Mystery Shopper Service | $150 per mystery shop | As incurred | We may require you to participate in our mystery shopper program. Payable to the mystery shopper service | |
| Prohibited Product or Service Fee | $250 per day | On demand, if incurred | Payable if you offer any product or service at or from your Facility that we have not approved | |
| Search Area/Territory Change for Franchise Agreement or Development Agreement | $2000 | Upon demand, via ACH or wire transfer. | Payable if you wish to change your initial search area/territory as described in your Franchise Agreement or Development Agreement, requiring a written amendment to one or both agreements. | |
| Daily Noncompliance Fee | Currently $100 per day that you are out of compliance, but we reserve the right to change this amount at any time. | Upon demand, via ACH. | See Note 4 |
Except as otherwise indicated in the preceding chart, all fees described in this Item 6 are non-refundable and currently are uniformly imposed, and we impose all fees and expenses listed and you must pay them to us. Except as specifically stated above, the amounts given may be due to changes in market conditions, our cost of providing services and future policy changes.
Source: Item 6 — OTHER FEES (FDD pages 15–20)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the $5,000 renewal fee is due when the renewal Franchise Agreement is signed. This means that a franchisee must pay Alloy $5,000 at the time of signing a new franchise agreement to continue operating under the Alloy brand.
This fee is a standard practice in franchising, intended to cover Alloy's costs associated with reviewing the franchisee's performance, updating the franchise agreement, and providing continued support. It's important for prospective franchisees to factor this renewal fee into their long-term financial planning. Franchisees should also inquire about any other conditions or requirements for renewal, such as meeting certain performance metrics or completing required training programs.
It is important to note that the FDD states that all fees are non-refundable unless otherwise indicated. This means that if the renewal agreement is signed and the fee is paid, but the franchisee later decides not to continue with the franchise, the $5,000 fee will likely not be returned. Therefore, franchisees should carefully consider their decision to renew before signing the agreement and paying the fee.