What happens if an Alloy franchisee is in default at the time of renewal?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
tions in the Data Sheet to take into account the term of the lease for your Authorized Location.
- B. Renewal. You will have the option to renew your rights under this Agreement for one (1) renewal term of 10 years. We may grant you the option to enter into a renewal agreement for your Facility provided that with respect to the renewal agreement: (i) you have given us written notice of your intent to enter into a renewal agreement at least 6 months but not more than 12 months prior to the end of the expiring term; (ii) you sign our then-current form of franchise agreement (modified to reflect that the agreement relates to a renewal agreement), the terms of which may differ from this Agreement, including higher fees; (iii) you have complied with the provisions of subparagraph 5.E regarding modernization and you perform any further items of modernization and/or replacement of the building, premises, trade dress, equipment and grounds as may be necessary for your Facility to conform to the standards then applicable to new ALLOY facilities, regardless of the cost of such modernizations and/or replacements; (iv) you are not in default of this Agreement or any other agreement pertaining to the franchise granted, you have not been in default of this Agreement on three or more occasions during the term of this Agreement, regardless of whether any cure has been effectuated, have satisfied all monetary and material obligations on a timely basis during the term, and are in good standing; (v) if leasing the Facility premises, you have renewed the lease and have provided written proof of your ability to remain in possession of the premises throughout the renewal pe
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 51–56)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, an Alloy franchisee cannot renew their franchise agreement if they are in default at the time of renewal. To be eligible for renewal, the franchisee must provide written notice of intent to renew at least 6 months but not more than 12 months before the current term expires. They must also sign the then-current form of the franchise agreement, which may have different terms and higher fees than the original agreement.
Additionally, the franchisee must have complied with modernization requirements and perform any necessary modernizations or replacements to meet the standards for new Alloy facilities. The franchisee must not be in default of the agreement or any other agreement related to the franchise and must have satisfied all monetary and material obligations on time. They also must be in good standing. If the franchisee is leasing the facility, they must renew the lease and provide proof of their ability to remain in possession of the premises throughout the renewal period.
Furthermore, the franchisee must comply with Alloy's then-current training requirements and pay a renewal fee of $5,000. Finally, the franchisee, owners, and guarantors must execute a general release of claims in a form prescribed by Alloy. Meeting all these conditions is essential for an Alloy franchisee to be granted the option to renew their franchise agreement for an additional 10-year term.