If the franchisee is more than one individual, how are references to 'you' interpreted in the Alloy Franchise Agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
- E. References. If the franchisee is 2 or more individuals, the individuals are jointly and severally liable, and references to you in this Agreement includes all of the individuals. Headings and captions contained herein are for convenience of reference and may not be taken into account in construing or interpreting this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if the franchisee consists of two or more individuals, those individuals are considered jointly and severally liable. This means that each individual is fully responsible for all obligations and liabilities under the Franchise Agreement. References to "you" within the agreement encompass all of the individuals collectively.
This has significant implications for prospective Alloy franchisees who plan to co-own a franchise. Each individual owner is responsible for the actions of the others, and Alloy can pursue any or all of the owners for any breach of contract or other liability. This is a standard practice in franchising, as it protects the franchisor by ensuring that all owners are fully accountable.
For example, if one owner fails to meet a financial obligation, Alloy can seek the full amount from any of the other owners. Similarly, if one owner violates the terms of the Franchise Agreement, all owners could be held responsible for the breach. Therefore, it is crucial for potential co-owners to carefully consider their relationship and trust levels before entering into a franchise agreement with Alloy, and to seek legal counsel to fully understand the implications of joint and several liability.