factual

Does the Alloy franchise agreement create a fiduciary relationship?

Alloy Franchise · 2025 FDD

Answer from 2025 FDD Document

rea Development Agreement to the contrary, the Agreement is amended as follows:

    1. Section 3, Development Fee, is amended to include the following statement: The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by franchisee to the franchisor until the franchisor has completed its pre-opening obligations under the area development agreement.
    1. In all other respects, the Area Development Agreement will be construed and enforced according to its terms.

Each of the undersigned hereby acknowledges having read and understood this Addendum and consents to be bound by all of its terms.

FRANCHISOR: Alloy Personal Training, LLC DEVELOPER:

WASHINGTON ADDENDUM TO THE FRANCHISE DISCLOSURE DOCUMENT, THE FRANCHISE AGREEMENT, AND ALL RELATED AGREEMENTS

The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document, the franchise agreement, and all related agreements regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.

    1. Conflict of Laws. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
    1. Franchisee Bill of Rights. RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise. There may also be court decisions that supersede the franchise agreement or related agreements concerning your relationship with the franchisor. Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
    1. Site of Arbitration, Mediation, and/or Litigation. In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
    1. General Release. A release or waiver of rights in the franchise agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2). In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).
    1. Statute of Limitations and Waiver of Jury Trial. Provisions contained in the franchise agreement or related agreements that unreasonably restrict or limit the statute of limitations period for claims under the Washington Franchise Investment Protection Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
    1. Transfer Fees. Transfer fees are collectable only to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
    1. Termination by Franchisee. The franchisee may terminate the franchise agreement under any grounds permitted under state law.
    1. Certain Buy-Back Provisions. Provisions in franchise agreements or related agreements that permit the franchisor to repurchase the franchisee's business for any reason during the term of the franchise agreement without the franchisee's consent are unlawful pursuant to RCW 19.100.180(2)(j), unless the franchise is terminated for good cause.

Source: Item 23 — RECEIPTS (FDD pages 69–245)

What This Means (2025 FDD)

Based on the 2025 Franchise Disclosure Document, the Alloy franchise agreement's relationship with franchisees is addressed specifically in addenda for certain states. For instance, the Washington Addendum indicates that the Washington Franchise Investment Protection Act may supersede provisions in the franchise agreement regarding the franchisee's relationship with Alloy, particularly concerning termination and renewal. It also clarifies that franchise agreement provisions are subject to state law. This suggests that the standard franchise agreement may not fully define the legal relationship in certain states, and state laws may provide additional protections or stipulations.

Furthermore, the California Addendum explicitly states that no agreement signed by a franchisee can waive claims under state franchise law, including fraud, or disclaim reliance on statements made by Alloy. This provision is designed to override any conflicting terms in other documents related to the franchise agreement. This indicates a proactive approach to ensuring franchisees in California retain their legal rights and protections under state law, regardless of what the standard franchise agreement might say.

While these addenda address specific legal protections and rights of franchisees in certain states, they do not explicitly define the franchise relationship as a fiduciary one. A fiduciary relationship implies a duty of trust, confidence, and good faith, which may not be fully captured by the provisions outlined in these addenda. Prospective franchisees should consult with legal counsel to understand the full extent of their rights and obligations, and whether a fiduciary duty exists under the laws of their specific state.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.