When is the Development Fee for an Alloy franchise due?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
DEVELOPMENT FEE
-
- 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 compensates Alloy for granting the development rights outlined in the agreement and is considered fully earned upon receipt and is nonrefundable. The specific amount of the Development Fee is designated on the Data Sheet.
However, there are addenda for franchisees in South Dakota and Virginia that may affect the payment terms of the development fee. For South Dakota franchisees, due to Alloy's financial condition, the South Dakota Securities Regulation Office requires that all development fees and initial payments be deferred until the first facility developed under the development agreement opens. For Virginia franchisees, the Virginia State Corporation Commission's Division of Securities and Retail Franchising requires Alloy to defer payment of the initial franchise fee and other initial payments until Alloy has completed its pre-opening obligations under the franchise agreement.
Prospective Alloy franchisees should carefully review the Data Sheet for the specific Development Fee amount and check for any state-specific addenda that may alter the payment schedule. It is important to note that the Development Fee is nonrefundable, so franchisees should be certain of their commitment before signing the Development Agreement and remitting payment (or agreeing to the payment terms outlined in any addenda).