When might an Alloy franchisee be required to pay for product testing?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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You must permit us or our agents, during normal business hours, to remove a reasonable number of samples of products from your inventory or from the Franchised Business free of charge for testing by us or by an independent laboratory to determine whether the samples meet our thencurrent standards and specifications. In addition to any other remedies we may have, we may require you to pay for the testing if we have not previously approved the supplier of the item or if the sample fails to conform to our specifications.
Except for those items where we have approved a sole supplier, if you wish to purchase, lease or use any products or other items, or you wish to purchase from an unapproved supplier, you must submit a written request for approval, or must request the supplier to do so. We must approve any product or supplier in writing before you make any purchases of that product or from that supplier. We can require that our representatives be permitted to inspect the supplier's facilities and that samples from the supplier be delivered either to us or to an independent laboratory for testing. We reserve the right to re-inspect the facilities and products of any approved supplier and to revoke our approval if the supplier fails to continue to meet any of our then-current
standards. Our supplier approval procedure does not obligate us to approve any particular supplier, and in certain circumstances we may designated a supplier as a sole supplier or one of two or three approved suppliers. We will notify you within six months after we complete the inspection and evaluation process of our approval or disapproval of any proposed supplier. We are not required to make available to you or to any supplier the criteria for product or supplier approval that we deem confidential. You must reimburse all costs we incur related to evaluating a product or supplier that you propose, up to a maximum of $5,000 per request. We may also revoke approval of a particular product or supplier. If we notify you in writing that our approval has been revoked, you must stop purchasi
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy franchisees may be required to pay for product testing under specific circumstances. Alloy or its agents can take product samples from the franchisee's business to test if they meet the brand's standards. If the franchisee uses a supplier that Alloy hasn't previously approved, or if the product sample fails to meet Alloy's specifications, the franchisee may have to cover the costs of the testing.
If a franchisee wants to use a new product or supplier that hasn't been approved, they need to request approval in writing. Alloy can then inspect the supplier's facilities and test product samples. The franchisee is responsible for reimbursing Alloy for the costs of evaluating the new product or supplier, up to $5,000 per request. Alloy will notify the franchisee of their decision within six months of completing the evaluation process.
This policy ensures that all Alloy locations maintain consistent quality and adhere to the brand's standards. It also means that franchisees need to be careful about where they source their products and be prepared to pay for testing and evaluation if they deviate from Alloy's approved suppliers. Franchisees should factor these potential costs into their budget and carefully consider the implications of choosing unapproved suppliers.