What criteria must an Alloy franchisee meet for the Landlord to not unreasonably withhold consent for an assignment or sublet?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Any such assignment shall be subject to the prior written consent of the Landlord, which Landlord
shall not unreasonably withhold as it relates to a creditworthy franchisee who otherwise meets Franchisor's then-current standards and requirements for franchisees and agrees to operate the Facility as an ALLOY Facility pursuant to a Franchise Agreement with Franchisor. Upon receipt by Landlord of an assumption agreement pursuant to which the assignee agrees to assume the Lease and to observe the terms, conditions and agreements on the part of Tenant to be performed under the Lease, the Franchisor shall thereupon be released from all liability as tenant under the Lease from and after the date of assignment, without any need of a written acknowledgement of such release by Landlord.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee seeks to assign their lease to another party, the landlord's consent is required. However, the landlord cannot unreasonably withhold this consent if the proposed assignee meets specific criteria. The assignee must be a creditworthy franchisee who also meets Alloy's then-current standards and requirements for franchisees. Additionally, the assignee must agree to operate the facility as an Alloy facility, adhering to a Franchise Agreement with Alloy.
This provision protects the franchisee by preventing the landlord from arbitrarily denying an assignment or sublet to a qualified party. It also benefits Alloy by ensuring that any new operator maintains the brand's standards and continues to operate under a franchise agreement. This clause is fairly standard in franchise agreements, as it balances the landlord's interest in a reliable tenant with the franchisee's need for flexibility and the franchisor's need to maintain brand consistency.
To finalize the assignment, the landlord must receive an assumption agreement where the assignee commits to assuming the lease and adhering to its terms. Upon receipt of this agreement, Alloy is released from any liability as a tenant under the lease from the assignment date onward, without needing written acknowledgment from the landlord. This clarifies the responsibilities and liabilities of each party involved in the assignment process, providing a clear path for a smooth transition.