Does Alloy's contribution of Allowances from approved suppliers reduce a franchisee's Brand Development Fee obligation?
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 may contribute allowances received from approved suppliers to the Brand Development Fund. However, Alloy's contribution does not reduce or eliminate a franchisee's obligation to pay the Brand Development Fee.
Franchisees must pay a monthly Brand Development Fee equal to 2% of Gross Sales. This fee goes into the Brand Development Fund, which Alloy uses for marketing, promotion, and brand development programs to promote the Alloy system. Alloy-owned facilities and those owned by its affiliates also contribute to the Fund on the same basis as franchisees.
This means that even if Alloy contributes allowances to the Brand Development Fund, franchisees are still required to pay the full 2% of Gross Sales monthly. Franchisees cannot reduce their contribution based on Alloy's contributions from supplier allowances. This ensures that the Brand Development Fund has consistent funding from all franchisees, regardless of any additional contributions Alloy might make.