Can Alloy contribute Allowances received from approved suppliers to the Brand Development Fund?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay us a monthly Brand Development Fee equal to 2% of Gross Sales to be contributed to the Brand Development Fund ("Fund") for marketing, promotion brand development programs to promote the Alloy System. Facilities owned by us and our affiliates will contribute to the Fund on the same basis as franchisees. We have the right to establish and administer the Fund. As stated in Item 8, we may contribute Allowances we receive from approved suppliers to the Fund. If we choose to do this, it does not reduce or eliminate your obligation to pay the Brand Development Fee.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–42)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy has the right to contribute allowances received from approved suppliers to the Brand Development Fund. This fund is used for marketing, promotion, and brand development programs to promote the Alloy system. Alloy-owned facilities also contribute to the fund on the same basis as franchisees.
If Alloy chooses to contribute allowances to the Brand Development Fund, this contribution does not reduce or eliminate a franchisee's obligation to pay the Brand Development Fee, which is 2% of Gross Sales. This means that even if Alloy is supplementing the fund with supplier allowances, franchisees are still required to pay their full Brand Development Fee.
The Brand Development Fund is intended to maximize general public recognition of Alloy's Proprietary Marks. Alloy has the right to determine how the fund will be spent and is not obligated to ensure that expenditures in any geographic area are proportionate to the payments made by franchisees in that area. This means that franchisees may not directly benefit from the fund in proportion to their contributions.
Alloy accounts for the Brand Development Fees separately from its other funds and may reimburse itself from the fund for costs associated with developing and distributing advertising materials, as well as collecting the Brand Development Fee. Any unspent funds will be carried over to the following year, and Alloy will provide an annual statement of funds collected and costs incurred upon written request. However, Alloy is not required to have the fund statement audited.