What happens to the Alloy Franchise Agreement if a transfer is attempted without Alloy's consent?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
val 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, any transfer attempted by a franchisee without Alloy's prior written consent, or that does not comply with the terms of the Franchise Agreement, will be considered void. This means the franchisee's interest in the agreement will be treated as voluntarily abandoned.
In such a case, Alloy has the right to choose one of two options. First, Alloy can deem the franchisee in default and terminate the Franchise Agreement. This would result in the franchisee losing their rights to operate under the Alloy brand and system. Second, Alloy can demand that the franchisee and any guarantors pay a transfer fee equal to two times the standard transfer fee. Given that the standard transfer fee is $10,000, this means the franchisee would have to pay $20,000.
This provision highlights the importance of obtaining Alloy's consent before attempting to transfer ownership or control of the franchise. Failing to do so can result in significant financial penalties or even termination of the franchise agreement. Prospective franchisees should carefully review the transfer provisions in the Franchise Agreement and ensure they understand the requirements for obtaining Alloy's consent.