Does the Alloy Franchise Agreement place any limitations or reviews on Alloy's rights?
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.
We and our affiliates also have the right to offer, sell or distribute any services or products associated with the System (now or in the future) or identified by the Trademarks, or any other trademarks, service marks or trade names through any distribution channels or methods, without compensation to any franchisee. The distribution channels or methods ("Alternative Methods of Distribution") include, without limitation, the Internet (or any other existing or future form of electronic commerce).
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to the 2025 FDD, the Alloy Franchise Agreement does place some limitations on Alloy's rights, primarily related to the franchisee's development territory and schedule. If a franchisee adheres to the Development Schedule, Alloy will not develop, operate, or franchise others to develop and operate an Alloy facility within the Development Territory. This protection lasts until the earliest of the agreement's expiration or termination, the date to execute the final Franchise Agreement, or the determination of the Authorized Location for the final Facility. However, this is subject to exceptions for Special Sites as defined in the agreement.
Upon the occurrence of any of these events, the franchisee's right to develop additional facilities expires, and Alloy regains the right to develop, operate, or franchise others within the Development Territory, except as otherwise provided in any existing Franchise Agreements. The franchisee's rights are specifically limited to developing facilities within the Development Territory and do not extend to other channels of distribution, resale, or control over Alloy's activities outside the Development Territory. Alloy retains all rights not expressly granted to the franchisee.
Alloy also has the right to establish or license others to establish franchised, company-owned, or affiliate-owned facilities at any location, regardless of proximity to the franchisee's Designated Area. They can also engage in Merger/Acquisition Activity with any businesses, even those in competition with Alloy, and convert them to operate under Alloy's trademarks. Furthermore, Alloy can sell and distribute services and products through any distribution channels or methods, including the Internet, without compensating the franchisee. These stipulations highlight that while Alloy grants certain development rights, it retains significant control and flexibility in expanding its brand and distribution network.