What does the Alloy Development Fee cover?

According to the 2025 Alloy Franchise Disclosure Document, the Development Fee serves as consideration for the rights granted to the developer under the Development Agreement. This fee compensates Alloy for granting the developer the right to establish multiple Alloy facilities within a specific Development Territory, as outlined in the agreement. The Development Fee is not a payment towards any individual Franchise Agreement for a specific facility. Instead, it covers the broader development rights.

Alloy specifies that the Development Fee is fully earned upon receipt and is nonrefundable. This means that once the fee is paid to Alloy, it is not subject to reimbursement under any circumstances, regardless of whether the developer successfully opens any or all of the planned Alloy facilities. This nonrefundable aspect represents a financial risk for the developer, as they could lose the entire Development Fee if they fail to meet the obligations outlined in the Development Agreement and Development Schedule.

Furthermore, the FDD states that the developer must submit a separate franchise application for each Alloy facility they intend to establish within the Development Territory. Upon Alloy's approval of the site for each facility, a separate Franchise Agreement must be executed. The terms and conditions of each Franchise Agreement will then govern the establishment and operation of that specific facility. This clarifies that the Development Agreement and the individual Franchise Agreements are distinct, with the former granting development rights and the latter governing the operation of each Alloy facility.