Does the Alloy franchise agreement allow for actions seeking injunctive relief to be pursued outside of arbitration?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Nothing in this Agreement bars either party's right to obtain injunctive relief against threatened conduct that will cause loss or damages to the other party, under the usual equity rules, including the applicable rules for obtaining restraining orders and preliminary injunctions. Furthermore, we and our affiliates have the right to commence a civil action against you or take other appropriate action for the following reasons: to collect sums of money due to us; to compel your compliance with trademark standards and requirements to protect the goodwill of the Trademarks; to compel you to compile and submit required reports to us; or to permit evaluations or audits authorized by this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the franchise agreement does not prevent either Alloy or the franchisee from seeking injunctive relief in cases of threatened conduct that could lead to losses or damages. This means that either party can pursue court action to obtain a restraining order or preliminary injunction under the usual equity rules, without being forced into arbitration.
Additionally, Alloy retains the right to initiate a civil action or take other appropriate steps to collect outstanding payments, ensure compliance with trademark standards, require the submission of necessary reports, or conduct authorized evaluations or audits. This provides Alloy with avenues for direct legal action to protect its interests and ensure franchisee compliance.
This clause benefits both Alloy and its franchisees by allowing swift action in situations where immediate harm is threatened, which might not be adequately addressed through arbitration. However, outside of these specific instances, disputes would likely be subject to the standard arbitration clauses found elsewhere in the franchise agreement. Franchisees should be aware of the circumstances under which Alloy might pursue legal action directly, as opposed to arbitration, and understand their rights and obligations in such situations.