Can Alloy establish or license others to establish franchised or company-owned facilities regardless of their proximity to my designated area?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
We retain all rights that are not expressly granted to you under this Agreement. Further, we and our affiliates may, among other things, on any terms and conditions we deem advisable, without compensation to any franchisee, and without granting you any rights therein:
- (i) establish and/or license others to establish franchised or company-owned or affiliate-owned Facilities at any location, regardless of the proximity of such facilities to your Designated Area;
- (ii) merge with, acquire or become associated with ("Merger/Acquisition Activity") any businesses or facilities of any kind (including those in competition with ALLOY) under other systems and/or marks, which businesses and facilities may convert to or operate under the Trademarks and may offer or sell training services or related products that are the same as or similar to the services or products offered at or from the Facility, and which may be located anywhere;
- (iii) sell and distribute for ourselves and/or license others to sell and distribute through franchised businesses or any other method of distribution services and products the same as or different from the services or products offered under the System, and which are offered and distributed under marks different than the Trademarks; and
- (iv) develop or franchise Special Site locations, which by their nature are unique and separate in character from sites generally developed as ALLOY facilities ("Special Sites"), and include, but are not limited to the following locations regardless of their location and their proximity to your Facility: (i) military bases; (ii) public transportation facilities (including airports); (iii) business or industry locations (e.g.
manufacturing site, office building), or sports facilities; (iv) student unions or other similar buildings on college or university campuses; (v) malls or enclosed shopping centers; and (vi) community and special events.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy retains the right to establish or license others to establish franchised or company-owned facilities at any location, regardless of proximity to a franchisee's designated area. This means that even if a franchisee has a designated area, Alloy can still open or allow others to open Alloy facilities nearby. Alloy also retains the right to merge with or acquire any businesses, including those that compete with Alloy, and these businesses can convert to or operate under Alloy's trademarks, potentially offering similar services or products as the franchisee's facility, regardless of location.
Alloy and its affiliates can also sell and distribute services and products, whether the same as or different from those offered under the Alloy system, through various distribution methods and under different trademarks, without compensating the franchisee. Furthermore, Alloy can develop or franchise "Special Site" locations, such as military bases, airports, business locations, college campuses, malls, and community events, regardless of their proximity to a franchisee's facility.
This lack of territorial exclusivity could significantly impact a franchisee's business. The franchisee will not be compensated should Alloy decide to open another franchise nearby. A prospective franchisee should consider the potential for competition from other Alloy locations or businesses acquired by Alloy when evaluating the franchise opportunity.