Does the Alloy franchise agreement specify which party is responsible for equitably adjusting the agreement if a clause is deemed unenforceable?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Severability. 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 scenario where one or more clauses are deemed void or unenforceable by a court. In such cases, the clause(s) will be treated as separable within that jurisdiction, and the rest of the agreement will remain valid and in effect.
The Alloy franchise agreement stipulates that the terms of the agreement must be equitably adjusted to compensate the appropriate party for any consideration lost due to the removal of the unenforceable clause(s). This means that if a clause is struck down, the agreement will be modified to ensure that the party who benefited from that clause is made whole, preserving the original intent of the contract as much as possible.
This provision aims to maintain fairness and balance in the agreement even if certain parts are invalidated. However, the agreement does not explicitly state which party is responsible for making the equitable adjustment. It simply states that the terms "must be equitably adjusted." It would be prudent for a prospective Alloy franchisee to seek clarification from the franchisor regarding the process and responsibility for determining and implementing these equitable adjustments to avoid potential disputes in the future.