Why were some Alloy franchisee facilities excluded from the Item 19 financial performance representation?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This financial performance representation discloses historical information regarding the 2024 Measurement Period (January 2024-December 2024) for (i) Part A - the average monthly revenue, monthly membership, revenue per member and actual monthly retention percentage for one Affiliate Operating Facility and 28 Franchisee Facilities open for the entire 2024 Measurement Period, (ii) Part B – monthly membership pricing and member attendance for one Affiliate Operating Facility and 28 Franchisee Facilities open for the entire 2024 Measurement Period and (iii) Part C – monthly revenue for 41 Franchisee Facilities that opened in 2024 but were not open for the entire 2024 Measurement Period. None of those Franchisee Facilities that opened in 2024 also closed in 2024. We have not included 6 Franchisee Facilities that opened during December 2024 since they did not have a full month's revenue. We also have not included 1 Franchisee Facility that opened prior to January 2024 but was closed for part of 2024 and subsequently transferred.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 57–62)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, certain franchisee facilities were excluded from the Item 19 financial performance representations for specific reasons related to their operational history during the 2024 measurement period. Specifically, the Item 19 data does not include six franchisee facilities that opened in December 2024 because they did not have a full month's revenue. Additionally, one franchisee facility that opened before January 2024 but was closed for part of 2024 and subsequently transferred was also excluded from the financial performance data.
Alloy's decision to exclude these facilities is based on the need to present a clear and representative picture of financial performance. Including locations that were not operational for the entire measurement period could skew the data and provide a misleading impression to potential franchisees. By focusing on facilities with a full year of operation, Alloy aims to offer a more accurate and reliable representation of potential financial outcomes.
This approach is fairly common in the franchise industry, as franchisors typically want to showcase performance based on a consistent operational history. Prospective Alloy franchisees should understand that the financial performance data provided is based on specific criteria and may not reflect the performance of new or recently transferred locations. It is important for potential franchisees to consider these factors and conduct their own due diligence to assess the potential financial performance of their specific location.
It would be prudent for prospective franchisees to inquire with Alloy about the performance of newer locations or those with interrupted operations to gain a more comprehensive understanding of potential financial outcomes. This additional information, combined with the data provided in Item 19, can help franchisees make informed decisions about their investment.