Does the Alloy Franchise Agreement specify any limitations or reviews on the franchisor's rights?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
edule**"). Time is of the essence for the development of each Facility in accordance with the Development Schedule. Each Facility must be developed and operated pursuant to a separate Franchise Agreement that you enter into with us pursuant to Section 4.B below.
- C. If you are in compliance with the Development Schedule, we will not develop or operate or grant anyone else a franchise to develop and operate a ALLOY facility (except for Special Sites as defined in Section 2.D or as otherwise set forth in this Agreement) in the Development Territory prior to the earlier of (i) the expiration or termination of this Agreement; (ii) the date on which you must execute the Franchise Agreement for your last Facility pursuant to the terms of the Development Schedule or (iii) the date on which the Authorized Location for your final Facility under this Agreement is determined. Notwithstanding anything in this Agreement, upon the earliest occurrence of any of the foregoing events (a) your right to develop any additional Facility will expire and (b) we will be entitled to develop and operate, or to franchise others to develop and operate, ALLOY facilities in the Development Territory, except as may be otherwise provided under any Franchise Agreement that has been executed between us and you and that has not been terminated. At the time you execute your final Franchise Agreement under the Development Schedule, you must have an Authorized Location for the Facility to be developed under the final Franchise Agreement.
- D. The rights granted under this Agreement are limited to the right to develop Facilities located in the Development Territory, and do not include (i) any right to sell products and services identified by the Trademarks at any location or through any other channels or methods of distribution, including the Internet (or any other existing or future form of electronic commerce), other than at Facilities within the Development Territory pursuant to the terms of the applicable Franchise Agreement, (ii) any right to sell products and services identified by the Trademarks to any person or entity for resale or further distribution, or (iii) any right to exclude, control or impose conditions on our development or operation of franchised, company or affiliate owned facilities at
any time or at any location outside of the Development Territory. You may not use the words ALLOY or any of the other Trademarks as part of the name of your corporation, partnership, limited liability company or other similar entity.
You acknowledge and agree that we and our affiliates have the right to operate and franchise others the right to operate facilities or any other business within and outside the Development Territory under trademarks other than the ALLOY Trademarks, without compensation to any franchisee, except that our operation of, or association or affiliation with, facilities (through franchising or otherwise) in the Development Territory that compete with ALLOY facilities will only occur through some form of merger or acquisition with an existing facility or retail chain business. Outside of the Development Territory, we and our affiliates have the right to grant other franchises or develop and operate company or affiliate owned ALLOY facilities and offer, sell or distribute any products or services associated with the System (now or in the future) and under the Trademarks or any other trademarks, service marks or trade names or through any distribution channel or method, all without compensation to any franchisee.
We and our affiliates have the right to offer, sell or distribute, within and outside the Development Territory, 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).
You acknowledge and agree that certain locations within the Development Territory are by their nature unique and separate in character from sites generally developed as facilities. As a result, you agree that the following captive market locations ("Special Sites") are excluded from the Development Territory and we have the right to develop or franchise such locations: (1) military bases; (2) public transportation facilities (including airports); (3) business or industry locations (e.g. manufacturing site, office building), or sports facilities; (4) student unions or other similar buildings on college or university campuses; (5) malls or enclosed shopping centers; and (6) community and special events.
E. This Agreement is not a Franchise Agreement, and you have no right to use in any manner the Trademarks or operate an ALLOY facility by virtue of this Agreement. You have no right under this Agreement to sublicense or subfranchise others to operate a business or facility or use the System or the Trademarks.
DEVELOPMENT FEE
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to the 2025 Alloy Franchise Disclosure Document, the agreement does specify certain limitations and reviews on Alloy's rights, particularly concerning the franchisee's development territory and adherence to Minnesota state laws if applicable. Alloy retains the right to develop or franchise others outside the Development Territory and through alternative channels of distribution. However, if the franchisee complies with the Development Schedule, Alloy will not develop or operate, nor grant franchises to others within the Development Territory, with exceptions for Special Sites, until the agreement expires, terminates, or the final Franchise Agreement is executed. This ensures that franchisees who meet their development obligations receive a degree of territorial protection during the term of their agreement.
For franchisees in Minnesota, the FDD includes an addendum that further clarifies Alloy's obligations and limitations. This addendum states that Alloy will defend against infringement claims involving the Alloy trademark and must comply with Minnesota statutes regarding termination and nonrenewal rights. Specifically, Minnesota law requires Alloy to provide franchisees with 90 days' notice of termination (with 60 days to cure) and 180 days' notice for nonrenewal, except in certain specified cases. The addendum also ensures that the Franchise Agreement does not reduce any of the franchisee's rights under Minnesota law and prohibits Alloy from requiring litigation to occur outside of Minnesota, offering additional protection to franchisees operating in that state.
Furthermore, the Alloy Franchise Agreement includes general provisions that address the severability of clauses and the integration of the agreement. Should any clause be deemed void or unenforceable, the remainder of the agreement remains valid, and the terms must be equitably adjusted. The agreement also specifies that it, along with all schedules, addenda, and appendices, constitutes the entire agreement between the parties, superseding prior negotiations. However, it clarifies that this does not disclaim any representations made in the Franchise Disclosure Document, ensuring that franchisees can rely on the information provided during the franchise sales process. These provisions provide a framework for interpreting and enforcing the agreement, while also protecting the franchisee's rights and interests.