What must an Alloy franchisee do immediately upon proposing a transfer?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ur prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer will be subject to our prior written approval, which approval will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee proposes to transfer their interest in the franchise, they must immediately notify Alloy. Following this notification, the franchisee must promptly submit an application for consent to transfer, along with any other required documents and information.
This requirement ensures that Alloy maintains control over who becomes a franchisee and that any potential new franchisee meets their standards. By requiring immediate notification and submission of documents, Alloy can begin the process of evaluating the proposed transfer and the potential transferee in a timely manner.
Failure to comply with this requirement could result in serious consequences for the franchisee. Alloy states that any attempted transfer without their prior written consent, or that does not comply with the terms of the agreement, will be considered void. In such a case, the franchisee's interest in the agreement will be considered voluntarily abandoned, and Alloy has the right to either terminate the agreement or collect a transfer fee equal to two times the standard transfer fee. Given that the standard transfer fee is $10,000, this could mean a penalty of $20,000.
This provision highlights the importance of adhering to the terms of the franchise agreement and obtaining Alloy's consent before making any transfer. Prospective franchisees should carefully consider these requirements and ensure they understand the process for transferring their franchise interest.