What happens if the Alloy franchisee fails to comply with their obligations regarding the Lease Addendum?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
As provided in the Franchise Agreement, Franchisor shall have the right to access the Premises during continuance of the Lease to ensure compliance by Tenant with its obligations under the Franchise Agreement.
You also are entitled to injunctive relief or specific performance under subparagraph 12.C for your failure to comply with your obligations.
If you do not exercise your option to enter into a renewal agreement prior to the expiration of this Agreement and continue to accept the benefits of this Agreement after the expiration of this Agreement, then at our option, this Agreement may be treated either as (i) expired as of the date of expiration with you then operating a franchise without the right to do so and in violation of our rights; or (ii) continued on a month-to-month basis ("Interim Period") until one party provides the other with written notice of such party's intent to terminate the Interim Period, in which case the Interim Period will terminate thirty (30) days after receipt of the notice to terminate the Interim Period.
In the latter case, all of your obligations shall remain in full force and effect during the Interim Period as if this Agreement had not expired, and all obligations and restrictions imposed on you upon expiration of this Agreement will be deemed to take effect upon termination of the Interim Period.
Further, Tenant shall be and remain liable to Landlord for all of its obligations under the Lease, notwithstanding any assignment or assumption of the Lease by Franchisor.
Franchisor shall be entitled to recover from Tenant all amounts it pays to Landlord to cure Tenant's defaults under the Lease, including interest and reasonable collection costs.
Upon the expiration or termination of the Lease, Landlord will cooperate with and assist Franchisor in gaining possession of the Premises and, if Franchisor does not elect to assume the Lease for the Premises consistent with paragraphs 3 or 4 above, Landlord will allow Franchisor to enter the Premises, without being guilty of trespass and without incurring any liability to Landlord except for any damages caused by Franchisor's willful misconduct or gross negligence, to remove all signs and all other items identifying the Premises as an ALLOY Facility and to make such other modifications (such as repainting) as are reasonably necessary to protect the ALLOY Marks and System, and to distinguish the Premises from ALLOY Facilities.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy has the right to access the premises during the lease to ensure the franchisee complies with their obligations under the Franchise Agreement. If the franchisee fails to meet the facility standards, Alloy is entitled to injunctive relief or specific performance.
If the franchisee does not renew the agreement but continues to operate, Alloy can treat the agreement as expired, meaning the franchisee operates without the right to do so, violating Alloy's rights. Alternatively, Alloy can continue the agreement on a month-to-month basis, during which all obligations remain in effect. Upon termination of this interim period, all restrictions imposed on the franchisee upon expiration of the agreement will take effect.
If the franchisee defaults on their lease obligations, Alloy has the option to assume the lease. If Alloy assumes the lease, the franchisee remains liable for obligations prior to the assignment and must reimburse Alloy for any amounts paid to cure the franchisee's defaults, including interest and collection costs. Upon lease expiration or termination, the landlord will assist Alloy in gaining possession of the premises, allowing Alloy to remove signs and modify the premises to protect its marks and system.