What happens to the Alloy Franchise Agreement and Area Development Agreement if this rider is in effect?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Rider to State Addendum to ALLOY® Franchise Disclosure Document ("FDD"), Franchise Agreement and/or Area Development Agreement (if applicable) is entered into by and between Alloy Personal Training, LLC, 2500 Old Alabama Road, Suite 24, Roswell, Georgia 30076 ("we" or "us") and ("you"). A. This Rider is being signed because you are a resident of one of the states listed in the heading of this Rider (the "Applicable Franchise Registration State") or a non-resident who is acquiring franchise rights permitting the location of one or more ALLOY® businesses in the Applicable Franchise Registration State. B. We and you have contemporaneously herewith entered into a Franchise Agreement (the "Agreement") and/or an Area Development Agreement (if applicable) and wish to amend the Agreement as provided herein. NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the FDD and Agreement and Area Development Agreement (if applicable) are hereby amended as follows: 1. The following language is hereby added to the end of the FDD, Agreement and Area Development Agreement (if applicable): "No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise." 2. Except as provided in this Rider, the Agreement and Area Development Agreement remains in full force and effect in accordance with its terms. This Rider shall be effective only to the extent that the jurisdictional requirements of the franchise law of the Applicable Franchise Registration State are met independently without reference to this Rider.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, a rider to the Franchise Agreement and Area Development Agreement is used to amend those agreements. The rider states that unless specifically changed by the rider's terms, the original Franchise Agreement and Area Development Agreement remain in full effect. The rider is only effective if the jurisdictional requirements of the franchise law are met independently, without relying on the rider itself.
For franchisees in specific states like California, Illinois, Minnesota, South Dakota, and Virginia, addenda are included to comply with those states' franchise regulations. These addenda address various issues such as financial assurances required by state authorities due to Alloy's financial condition, and modifications to clauses regarding termination, non-renewal, and governing law to align with state statutes. For example, in Illinois, any provision designating jurisdiction or venue outside the state is void, although arbitration outside of Illinois may be allowed. Similarly, in South Dakota, development fees and initial payments may be deferred until the first facility opens.
Furthermore, the rider includes a provision that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Alloy or its representatives. This provision takes precedence over any conflicting terms in other documents related to the franchise agreement. This ensures that franchisees retain their rights and protections under state laws, regardless of any agreements they may have signed.