What constitutes a failure regarding the Washington State Franchise Investment Protection Act that would affect Alloy's receipts?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Liability for the payment of this sum, to which we hereby obligate and bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, becomes effective upon the following conditions:
- Approval by the Administrator of the Washington State Securities Division of the Principal's application to offer or sell franchises in this state; and
- Failure by the Principal to strictly comply with all applicable provisions of, and all orders, rules, and regulations issued pursuant to, the Washington State Franchise Investment Protection Act, chapter 19:100 RCW.
This Bond shall expire at such time as the Principal's registration is withdrawn, terminates through non-renewal, or is revoked by the Securities Division except as to liabilities of the Principal arising prior to such time. 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.
It is understood that any person(s) having a claim under the conditions of this obligation may institute suit in any court of competent jurisdiction against the Principal and/or the Surety upon this Bond.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, a failure to comply with the Washington State Franchise Investment Protection Act (WFIPA) can affect Alloy's receipts. Specifically, the franchisor has a surety bond on file with the State of Washington due to its financial condition, as required by the Washington Department of Financial Institutions. This bond ensures that Alloy will comply with all applicable provisions, orders, rules, and regulations issued under the WFIPA.
Liability for payment related to the surety bond becomes effective if Alloy fails to strictly comply with the WFIPA. This means that if Alloy violates the WFIPA, the surety can be used to cover claims against Alloy. The bond remains valid until Alloy's registration is withdrawn, terminated through non-renewal, or revoked by the Securities Division, except for liabilities arising before such termination. The surety can cancel the bond with a 30-day written notice to Alloy and the Securities Division, which becomes effective upon receipt of the notice by both parties, except for liabilities predating the cancellation.
Any person with a claim under the conditions of the bond can sue Alloy and/or the surety in a competent court. This measure ensures that franchisees have recourse if Alloy violates the WFIPA, providing a level of financial assurance due to Alloy's financial condition. Prospective franchisees in Washington should understand the implications of this surety bond and the conditions under which claims can be made, as it directly relates to Alloy's compliance with state franchise laws and the financial protections available to franchisees.