What happens if the franchisee fails to comply with pre-opening obligations for an Alloy facility?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not open your Facility for business until we have notified you in writing that you have satisfied your pre-opening obligations as set forth in subparagraphs 5.A and 5.B and we have consented to your opening date. We are not responsible or liable for any of your pre-opening obligations, losses or expenses you might incur for your failure to comply with these obligations or your failure to open by a particular date. We also are entitled to injunctive relief or specific performance under subparagraph 12.C for your failure to comply with your obligations.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, a franchisee cannot open their facility for business until Alloy provides written notification that the franchisee has satisfied all pre-opening obligations. Alloy is not responsible or liable for any losses or expenses the franchisee incurs if they fail to meet these obligations or fail to open by a specific date. Alloy also has the right to seek injunctive relief or specific performance if the franchisee does not comply with their obligations.
This means that franchisees must diligently follow Alloy's pre-opening requirements to avoid delays or potential legal action. The franchisee bears the full financial risk of failing to meet these obligations, which could include expenses related to site selection, construction, and other preparations.
This requirement is fairly standard in franchising, as franchisors need to ensure consistency and quality across all locations. Franchisees should carefully review the pre-opening obligations outlined in the Franchise Agreement and seek clarification from Alloy on any unclear points to mitigate the risk of non-compliance.