Does the Alloy Franchise Agreement allow for competition from other channels of distribution or competitive brands that Alloy controls?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control.
We and our affiliates may sell products or offer services under the Proprietary Marks within and outside your Designated Territory through any method of distribution other than a dedicated Alloy Facility, including sales or web-based fitness instruction through channels of distribution such as the internet, catalog sales, telemarketing or other direct marketing sales (together, "alternative distribution channels"). You may not use alternative distribution channels to make sales outside or inside your Designated Territory and you will not receive any compensation for our sales through alternative distribution channels. We or one of our affiliates will fulfill all orders for merchandise placed through our website, and you will have no right to the revenue from these orders, even if the order originated from or was delivered to an address in your Designated Territory.
During the term of the Franchise Agreement, we (and any affiliates that we periodically might have) have the right:
- (1) to establish and operate, and grant rights to other franchise owners to establish and operate, Facilities or similar businesses at any locations outside your Designated Territory and on any terms and conditions we deem appropriate;
- (2) 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 Marks 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 Franchised Business, and which may be located anywhere;
Although you will receive a Development Territory with certain protected rights to develop multiple Alloy Facilities, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control. If you meet the Minimum Performance Schedule, comply with all other provisions described in the Area Development Agreement and otherwise comply with the provisions of each related Franchise Agreement, we will not establish or license others to establish a Facility within the Development Territory assigned to you.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees may face competition from other franchisees, outlets Alloy owns, other distribution channels, and competitive brands that Alloy controls. Specifically, Alloy and its affiliates retain the right to sell products or offer services under Alloy's trademarks both within and outside a franchisee's designated territory through alternative distribution channels like the internet, catalog sales, telemarketing, or other direct marketing sales. Franchisees will not receive compensation for sales made through these alternative distribution channels, even if the order originated from or was delivered to an address within their designated territory. Alloy or one of its affiliates will fulfill all merchandise orders placed through their website, and franchisees have no right to the revenue from these orders.
Alloy also retains the right to establish and operate, or grant rights to other franchise owners to establish and operate, Alloy facilities or similar businesses at any locations outside a franchisee's designated territory under terms and conditions Alloy deems appropriate. Alloy can also engage in merger/acquisition activity with any businesses or facilities of any kind, including those in competition with Alloy, under other systems and/or marks. These businesses and facilities may convert to or operate under Alloy's marks and may offer or sell training services or related products that are the same as or similar to those offered at the franchised business, and which may be located anywhere.
For franchisees entering into an Area Development Agreement, while they receive a Development Territory with certain protected rights to develop multiple Alloy Facilities, they will not receive an exclusive territory. This means that franchisees operating under an Area Development Agreement may face competition from other franchisees, from outlets Alloy owns, or from other channels of distribution or competitive brands that Alloy controls. However, if the franchisee meets the Minimum Performance Schedule and complies with all other provisions described in the Area Development Agreement and each related Franchise Agreement, Alloy will not establish or license others to establish a Facility within the Development Territory assigned to the franchisee.