How is the Designated Area for an Alloy franchise described in the Franchise Agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ating or reverse engineering the Alloy App in any manner.
ITEM 12 TERRITORY
Franchise Agreement
The Franchise Agreement grants you the right to operate your Franchised Business only at the location we approve ("Authorized Location"). You will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control. However, we will grant you a protected area, which will be described in an exhibit to your Franchise Agreement ("Designated Area"). If your Designated Area is located in a suburban area, your Designated Area will include a population of at least 30,000 people, which for most suburban areas will cover a radius of approximately 2 miles from the Authorized Location (taking into account any geographic factors like rivers or other similar natural boundaries). We reserve the right to create a more limited Designated Area for Facilities located in densely populated areas but your Designated Area will have a population of at least 30,000 people. Your Designated Area may be described in terms of street boundaries or may be drawn on a map to be attached to your Franchise Agreement. We (and any affiliates) will not establish, nor allow another franchise owner to establish, another Franchised Business located within your Designated Area, although in certain instances there may be overlap of Designated Area boundaries of two franchisees. We do not anticipate permitting franchisees to establish
Facilities at captive market locations, such as a shopping mall, office building, or similar location. There are no circumstances under which we can modify the boundaries of your Designated Area during the term of your Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the Franchise Agreement grants the franchisee the right to operate their franchised business only at an approved location. While the franchisee does not receive an exclusive territory, they are granted a protected area, referred to as the "Designated Area," which will be detailed in an exhibit to the Franchise Agreement.
For Alloy franchises located in suburban areas, the Designated Area will include a population of at least 30,000 people, typically covering a radius of approximately 2 miles from the Authorized Location. This radius takes into account geographic factors such as rivers or natural boundaries. Alloy retains the right to create a more limited Designated Area for facilities in densely populated areas, but it will still include a minimum population of 30,000 people. The Designated Area may be described using street boundaries or depicted on a map attached to the Franchise Agreement.
Alloy (and its affiliates) will not establish or allow another franchise owner to establish another franchised business within the franchisee's Designated Area. However, there may be instances where the Designated Area boundaries of two franchisees overlap. Alloy does not anticipate permitting franchisees to establish facilities at captive market locations, such as shopping malls or office buildings. The boundaries of the Designated Area cannot be modified during the term of the Franchise Agreement.
To maintain territorial rights, an Alloy franchisee must achieve a minimum level of Gross Sales annually. The FDD states that there is no Minimum Annual Gross Sales for the period of time between signing the Franchise Agreement and the date the business opens. The minimum annual gross sales for Year 1 of operation is $240,000, and for Year 2 and each subsequent year of operation through the initial term of the Franchise Agreement, the minimum annual gross sales is $300,000.