If Alloy exercises its purchase option, who can be designated to purchase the assets of the Alloy Facility?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Purchase Option. We have the right to purchase or designate a third party that will purchase all or any portion of the assets of your Facility that are owned by you or any of your affiliates including, without limitation, the premises, building, equipment, fixtures, signage, furnishings, supplies, leasehold improvements, and inventory of the Facility at a price determined by a qualified appraiser (or qualified appraisers if one party believes it is better to have a real estate appraiser appraise the value of the land and building and a business appraiser appraise the Facility's other assets) selected with the consent of both parties, provided we give you written notice of our preliminary intent to exercise our purchase rights under this Paragraph within 30 days after the date of the expiration or termination of this Agreement, or the expiration of any Interim Period. If the parties cannot agree upon the selection of an appraiser(s), one or both will be appointed by a Judge of the United States District Court for the District in which the Facility is located upon petition of either party.
The price determined by the appraiser(s) will be the reasonable fair market value of the assets based on their continuing use in, as, and for the operation of a ALLOY Facility and the appraiser will designate a price for each category of asset (e.g., land, building, equipment, fixtures, etc.), but shall not include the value of any goodwill of the business, as the goodwill of the business is attributable to the Trademarks and the System.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy has the right to either purchase the assets of the franchisee's facility itself or designate a third party to do so. These assets include items owned by the franchisee or their affiliates, such as the premises, building, equipment, fixtures, signage, furnishings, supplies, leasehold improvements, and inventory.
If Alloy decides to exercise this purchase option, they must provide written notice of their preliminary intent within 30 days after the expiration or termination of the Franchise Agreement, or the expiration of any Interim Period. The purchase price will be determined by a qualified appraiser selected with the consent of both Alloy and the franchisee. If they cannot agree on an appraiser, a judge from the United States District Court for the district where the facility is located will appoint one.
The price determined by the appraiser will reflect the reasonable fair market value of the assets, considering their continued use as an Alloy facility. The appraisal will designate a price for each asset category, such as land, building, equipment, and fixtures. However, the appraisal will not include the value of any goodwill, as the goodwill is attributed to Alloy's trademarks and system. This means that a franchisee will not be compensated for the reputation or brand value they have built locally.