What happens if there is an overlap of Designated Area boundaries between two Alloy franchisees?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchise Agreement grants you the right to operate your Franchised Business only at the location we approve ("Authorized Location"). You will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control. However, we will grant you a protected area, which will be described in an exhibit to your Franchise Agreement ("Designated Area"). If your Designated Area is located in a suburban area, your Designated Area will include a population of at least 30,000 people, which for most suburban areas will cover a radius of approximately 2 miles from the Authorized Location (taking into account any geographic factors like rivers or other similar natural boundaries). We reserve the right to create a more limited Designated Area for Facilities located in densely populated areas but your Designated Area will have a population of at least 30,000 people. Your Designated Area may be described in terms of street boundaries or may be drawn on a map to be attached to your Franchise Agreement. We (and any affiliates) will not establish, nor allow another franchise owner to establish, another Franchised Business located within your Designated Area, although in certain instances there may be overlap of Designated Area boundaries of two franchisees.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, while franchisees are granted a protected Designated Area, there may be instances where the boundaries of two franchisees' Designated Areas overlap. The FDD does not elaborate on how Alloy handles such overlaps in practice.
This potential overlap could lead to competition or confusion between franchisees, as they may be targeting the same potential customer base. It is important to note that Alloy retains the right to establish or allow other franchise owners to establish Alloy businesses outside of a franchisee's Designated Territory.
Prospective franchisees should seek clarification from Alloy regarding the specific procedures and policies in place to manage conflicts or competition arising from overlapping Designated Areas. Understanding how Alloy resolves these situations is crucial for assessing the potential risks and opportunities associated with a particular location. It would be prudent to inquire about historical instances of boundary overlaps and their resolutions to better understand Alloy's approach.