Does the Alloy franchise agreement allow Alloy to select its own legal counsel in the event of a claim?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
If a Franchise Claim is made against us or our affiliates, we reserve the right in our sole judgment to select our own legal counsel to represent our interests, at your cost.
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 select its own legal counsel in the event of a franchise claim made against them or their affiliates. This selection is based on Alloy's sole judgment and will be at the franchisee's cost.
This provision means that if a claim arises, such as one involving personal injury or property damage related to the Alloy business, Alloy can choose the legal representation they deem best to protect their interests. The franchisee is then responsible for covering the expenses of this legal counsel.
For a prospective Alloy franchisee, this could represent a significant financial obligation. It's important to understand the types of claims that could arise and the potential costs associated with Alloy's legal representation. Franchisees should factor this potential expense into their financial planning and consider obtaining appropriate insurance coverage to mitigate this risk. This is a fairly common clause in franchise agreements, as franchisors seek to protect their brand and reputation, but the financial burden on the franchisee can vary.