What happens if the Alloy franchisee fails to open by a particular date?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
in the Development Schedule. You also must comply with the Development Schedule requirements regarding (i) the opening date for each Facility and (ii) the cumulative number of Facilities to be open and continuously operating for business in the Development Territory. If you fail to either execute a Franchise Agreement or to open an Facility according to the dates set forth in this Agreement or otherwise fail to comply with the Development Schedule, we have the right to immediately terminate this Agreement pursuant to Section 7.B.
- B. You may not develop a Facility unless (i) at least 45 days, but no more than 60 days, prior to the date set forth in the Development Schedule for the execution of each Franchise Agreement, you send us a notice (a) requesting that we send you our then current disclosure documents, (b) confirming your intention to develop the particular Facility and (c) sending us all information necessary to complete the Franchise Agreement for the particular Facility, and (ii) all of the following conditions have been met (these conditions apply to each Facility to be developed in the Development Territory):
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- Your Submission of Proposed Site.
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Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees are bound by a Development Schedule that outlines specific dates for executing Franchise Agreements and opening Alloy facilities. This schedule also includes requirements for the cumulative number of facilities that must be open and operating within the Development Territory. If a franchisee fails to meet these deadlines, Alloy has the right to immediately terminate the Development Agreement.
Furthermore, Alloy requires franchisees to designate an Authorized Location for their facility within 90 days of signing the agreement. The facility must be "under control" within 180 days. If these location requirements are not met, Alloy may grant an extension or terminate the agreement. Additionally, the Alloy facility must be open and operating within six months after signing a lease or 12 months after signing the Franchise Agreement, whichever comes first, unless Alloy authorizes a written extension.
Alloy also stipulates that a franchisee cannot open their facility until several conditions are met. These include compliance with site selection and construction requirements, completion of the initial training program, payment of all due fees, provision of required insurance certificates, obtaining necessary governmental permits and licenses, and securing at least 75 members during the pre-sale marketing campaign. Alloy is not liable for any losses or expenses incurred by the franchisee if they fail to meet these pre-opening obligations or fail to open by a specific date. Alloy also has the right to seek injunctive relief or specific performance if the franchisee fails to comply with their obligations.