What is the consequence if an Alloy franchisee fails to meet the Development Schedule outlined in the agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
in the Development Schedule. You also must comply with the Development Schedule requirements regarding (i) the opening date for each Facility and (ii) the cumulative number of Facilities to be open and continuously operating for business in the Development Territory. If you fail to either execute a Franchise Agreement or to open an Facility according to the dates set forth in this Agreement or otherwise fail to comply with the Development Schedule, we have the right to immediately terminate this Agreement pursuant to Section 7.B.
- B. You may not develop a Facility unless (i) at least 45 days, but no more than 60 days, prior to the date set forth in the Development Schedule for the execution of each Franchise Agreement, you send us a notice (a) requesting that we send you our then current disclosure documents, (b) confirming your intention to develop the particular Facility and (c) sending us all information necessary to complete the Franchise Agreement for the particular Facility, and (ii) all of the following conditions have been met (these conditions apply to each Facility to be developed in the Developme
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, failure to comply with the Development Schedule can lead to significant repercussions. Alloy has the right to immediately terminate the Development Agreement if the franchisee fails to execute a Franchise Agreement or open a facility according to the dates specified in the Development Schedule. This termination can occur without an opportunity to cure the breach, meaning the franchisee cannot rectify the situation to avoid termination.
In addition to immediate termination, Alloy has other options if a franchisee fails to meet the Development Schedule. Alloy may choose to terminate the agreement, reduce the number of facilities the franchisee has the right to develop, terminate or reduce the Development Territory, or repurchase any facilities already opened by the franchisee. Alloy can also exercise any other rights and remedies available under the law. These remedies provide Alloy with considerable flexibility in addressing a franchisee's non-compliance.
Time is considered of the essence for the development of each facility according to the Development Schedule, emphasizing the importance of adhering to the agreed-upon timeline. The rights and territorial protection granted to the franchisee are contingent upon strict compliance with the Development Schedule. This underscores the need for prospective Alloy franchisees to carefully assess their ability to meet the development obligations before entering into the agreement, as failure to do so can result in the loss of development rights and territorial protection.