Does Alloy give benefits like renewal based on buying items from approved suppliers?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
icers has an ownership interest in any approved supplier.
We may, when appropriate, negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of the System. These arrangements will include certain benefits to franchisees like having available sources of supply on a regular basis and may, with certain applied suppliers but not all suppliers, include negotiated price terms for the franchisees' benefit. At the present time there are no purchasing or distribution cooperatives established by us. We do not give you any benefits, like renewal or the granting of additional franchises, based on your buying any items from our approved suppliers.
We may establish strategic alliances or preferred vendor programs with suppliers that are willing to supply some products, equipment, or services to some or all of the centers in our system. If we do establish those types of alliances or programs, we may limit the number of approved suppliers with whom you may deal, we may designate sources that you must use for some or all products, equipment and services, and we may refuse to approve proposals from franchisees to add new suppliers if we believe that approval would not be in the best interests of the System.
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates based upon your purchases of products and services from manufacturers, suppliers, and distributors. We or our affiliates will have all of your right, title, and interest in and to any and all of these Allowances.
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, franchisees do not receive benefits like renewal or additional franchises for purchasing items from approved suppliers. While Alloy may negotiate purchase arrangements with designated and approved suppliers, these arrangements primarily ensure a regular supply of goods and may include negotiated price terms. However, these arrangements do not extend to preferential treatment regarding franchise renewal or the granting of additional franchise locations.
Alloy requires franchisees to obtain supplies, materials, and equipment from suppliers who meet the franchisor's standards. Alloy may negotiate purchase arrangements with suppliers, potentially benefiting franchisees through regular supply and negotiated prices. However, these benefits are distinct from incentives like franchise renewal or the granting of additional franchises.
Alloy also has the right to collect and retain allowances, rebates, credits, incentives, or benefits from suppliers based on franchisee purchases. For the fiscal year ended December 31, 2024, Alloy collected $221,972 in Allowances, which was 5.48% of their overall revenue of $4,048,688. These allowances may be contributed to the Brand Development Fund, but this does not reduce the franchisee's obligation to pay the Brand Development Fee. This demonstrates that while franchisees are required to purchase from approved suppliers, the direct financial benefits from these purchases primarily accrue to Alloy, not the franchisee, and do not influence renewal or expansion opportunities.