Does the Alloy Franchise Agreement require equitable adjustment if a clause is deemed void?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Should one or more clauses of this Agreement be held void or unenforceable for any reason by any court of competent jurisdiction, such clause or clauses will be deemed to be separable in such jurisdiction and the remainder of this Agreement is valid and in full force and effect and the terms of this Agreement must be equitably adjusted so as to compensate the appropriate party for any consideration lost because of the elimination of such clause or clauses. It is the intent and expectation of each of the parties that each provision of this Agreement will be honored, carried out and enforced as written. Consequently, each of the parties agrees that any provision of this Agreement sought to be enforced in any proceeding must, at the election of the party seeking enforcement and notwithstanding the availability of an adequate remedy at law, be enforced by specific performance or any other equitable remedy.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the Franchise Agreement addresses the possibility of clauses being deemed void or unenforceable. Specifically, if a court of competent jurisdiction finds one or more clauses to be void or unenforceable, those clauses will be treated as separable within that jurisdiction. This means that the rest of the agreement remains valid and in full effect.
Furthermore, the Alloy Franchise Agreement stipulates that in the event a clause is eliminated, the terms of the agreement must be equitably adjusted. This adjustment aims to compensate the appropriate party for any consideration lost as a result of the clause's removal. The intention behind this provision is to ensure that each provision of the agreement is honored, carried out, and enforced as written, to the greatest extent possible.
For a prospective Alloy franchisee, this clause offers a degree of protection. It ensures that if a specific part of the agreement is invalidated, the entire agreement doesn't automatically collapse. Instead, there's a mechanism for adjusting the terms to maintain fairness and balance, compensating for any losses incurred due to the unenforceable clause. This could involve financial adjustments, modifications to operational requirements, or other equitable remedies. Alloy also states that any provision of the Agreement sought to be enforced in any proceeding must, at the election of the party seeking enforcement and notwithstanding the availability of an adequate remedy at law, be enforced by specific performance or any other equitable remedy.