What is the effective time of day that the Alloy surety bond becomes effective?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Liability for the payment of this sum, to which we hereby obligate and bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, becomes effective upon the following conditions:
- Approval by the Administrator of the Washington State Securities Division of the Principal's application to offer or sell franchises in this state; and
- Failure by the Principal to strictly comply with all applicable provisions of, and all orders, rules, and regulations issued pursuant to, the Washington State Franchise Investment Protection Act, chapter 19:100 RCW.
This Bond shall expire at such time as the Principal's registration is withdrawn, terminates through non-renewal, or is revoked by the Securities Division except as to liabilities of the Principal arising prior to such time. This Bond may also be cancelled by the Surety upon 30 days written notice by registered mail to the Principal and to the Securities Division. At the end of the 30 day period, the Bond shall be deemed cancelled except as to liabilities of the Principal arising prior to the date of cancellation. The notice of cancellation shall be deemed effective and the 30 day period shall begin to run upon
FRANCHISOR SURETY BOND Page 1 of 3 Revised April 22, 2010
receipt by the Securities Division of said notice and sufficient proof of receipt of said notice by the Principal.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
The 2025 Alloy FDD does not specify the exact time of day that the surety bond becomes effective. However, it does outline the conditions under which the surety bond becomes effective in Washington state.
Specifically, the surety bond's effectiveness is tied to two conditions: first, the approval by the Administrator of the Washington State Securities Division of Alloy's application to offer or sell franchises in the state; and second, Alloy's strict compliance with all applicable provisions, orders, rules, and regulations issued under the Washington State Franchise Investment Protection Act.
Additionally, the bond's term is linked to Alloy's franchise registration status in Washington. It expires when the registration is withdrawn, terminates due to non-renewal, or is revoked by the Securities Division. However, this expiration does not affect liabilities arising before the termination date. The surety can also cancel the bond with a 30-day written notice to both Alloy and the Securities Division, with cancellation effective 30 days after the Securities Division receives the notice and proof that Alloy also received it.
For a prospective Alloy franchisee, it's important to clarify with the franchisor and the surety company the precise time of day the bond takes effect to fully understand the coverage period and any potential gaps in protection. This is especially important in states like Washington where the bond is a prerequisite for offering franchises.