What is the effect of an attempted transfer by an Alloy franchisee without prior written consent?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfer fee provided for in subparagraph 11.C.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, any attempted transfer by a franchisee without Alloy's prior written consent, or if the transfer does not comply with the terms of the Franchise Agreement, will be considered void. This means the transfer will not be recognized or legally binding.
Furthermore, the franchisee's interest in the Franchise Agreement will be treated as voluntarily abandoned. This implies the franchisee forfeits their rights and obligations under the agreement. Alloy then has the option to either consider the franchisee in default and terminate the Franchise Agreement, or to collect a transfer fee from the franchisee and any guarantors. This transfer fee is equal to two times the standard transfer fee, which is normally $10,000.
Therefore, an unapproved transfer could cost an Alloy franchisee $20,000 and potentially lead to termination of the franchise agreement. This highlights the importance of adhering to the prescribed transfer process and obtaining Alloy's consent before attempting to transfer ownership or control of the franchise.