When is the Alloy Development Fee due?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Simultaneously with the execution of this Agreement, you must pay a Development Fee as described below:
- A. As consideration for the rights granted in this Agreement, you must pay us a "Development Fee" in the amount designated on the Data Sheet. The Development Fee is consideration for this Agreement and not consideration for any Franchise Agreement, is fully earned by us upon receipt and is nonrefundable.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the Development Fee is due simultaneously with the execution of the Development Agreement. The Development Fee amount is designated on the Data Sheet. This fee serves as consideration for the rights granted to the developer under the Development Agreement, not for any specific Franchise Agreement.
The FDD specifies that the Development Fee is fully earned by Alloy upon receipt and is nonrefundable. This means that once the fee is paid, Alloy has no obligation to return it, regardless of whether the developer successfully opens any Alloy facilities.
Prospective developers should carefully consider the implications of this policy. They should ensure they have thoroughly evaluated the market potential of their development territory and have a solid plan for opening multiple Alloy locations before committing to the Development Agreement and paying the Development Fee. It is also important to note that in South Dakota, all development fees and initial payments by area developers shall be deferred until the first Facility developed under the development agreement opens.