What happens to unspent funds in the Alloy Brand Development Fund at the end of the year?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Any sums paid to the Fund that are not spent in the year they are collected will be carried over to the following year. We will prepare, and furnish to you upon written request, an annual statement of funds collected and costs incurred. We are not required to have the Fund statement audited, but if we choose to have the Fund audited it will be at the Fund's expense.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–42)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, any unspent funds from the Brand Development Fees collected during the year will be carried over to the following year. Alloy will provide an annual statement of funds collected and costs incurred upon written request from the franchisee. While Alloy is not required to have the fund statement audited, they may choose to do so at the Fund's expense.
This means that franchisees' contributions to the Brand Development Fund are not necessarily spent within the same year they are collected. Instead, Alloy retains the flexibility to allocate these funds in subsequent years, potentially allowing for larger or longer-term marketing initiatives.
It is important to note that Alloy has no fiduciary obligation to franchisees regarding the Brand Development Fund. While franchisees can request an annual statement, there is no guarantee the fund will be audited unless Alloy chooses to do so. Franchisees should consider these factors and the potential implications for how their contributions are managed and utilized for the Alloy system's marketing and promotion.