What is considered an unreasonable withholding of consent by Alloy for a franchise transfer?

According to Alloy's 2025 Franchise Disclosure Document, any agreement used in connection with a transfer will be subject to Alloy's prior written approval, which approval will not be withheld unreasonably.

However, the FDD does not explicitly define what Alloy considers "unreasonable withholding of consent" in the context of a franchise transfer. Instead, it outlines several conditions that must be met for Alloy to consent to a proposed transfer. These conditions include the assignee meeting Alloy's then-current requirements for franchisees, payment of all amounts owed to Alloy or its affiliates, providing all required reports, and complying with modernization provisions.

Since the FDD does not define what constitutes an unreasonable withholding of consent, it is important for a prospective franchisee to discuss this matter with Alloy. Understanding specific scenarios or examples of what Alloy would consider unreasonable can provide clarity and help avoid potential disputes during a future transfer situation. A franchisee should inquire about specific, objective criteria Alloy uses to evaluate transfer requests and what recourse a franchisee has if they believe consent is being unreasonably withheld.