What happens if an Alloy franchisee, any Owners, or guarantors plead no contest to any felony?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
paid to us or any of our affiliates, conviction of you, an Owner, or a guarantor of (or pleading no contest to) any misdemeanor that brings or tends to bring any of the Trademarks into disrepute or impairs or tends to impair your reputation or the goodwill of any of the Trademarks or the Facility, any felony, filing of tax or other liens that may affect this Agreement, voluntary or involuntary bankruptcy by or against you or any Owner or guarantor, insolvency, making an assignment for the benefit of creditors or any similar voluntary or involuntary arrangement for the disposition of assets for the benefit of creditors.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee, an Owner, or a guarantor pleads no contest to any felony, it can have significant repercussions on the franchise agreement. Specifically, such a plea is treated the same as a conviction.
This provision protects Alloy's trademarks and reputation. A felony conviction or a plea of no contest to a felony by a franchisee, Owner, or guarantor could damage Alloy's brand image and goodwill. This clause allows Alloy to take action to protect its brand.
For a prospective Alloy franchisee, this means that their personal conduct and the conduct of their Owners and guarantors are subject to scrutiny. Any past or future felony convictions or no contest pleas could potentially jeopardize their franchise agreement. Franchisees should ensure that all parties involved in the franchise are aware of this provision and maintain a clean legal record to avoid any issues with Alloy.