If the franchisee is a partnership, what change requires Alloy's consent for transfer?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Specifically, but without limiting the generality of the foregoing, the following events constitute a transfer and you must comply with the right of first refusal, consent, transfer fee, and other transfer conditions in this Paragraph 11:
Any change in the percentage of the franchisee entity owned, directly or indirectly, by any Owner (including any addition or deletion of any person or entity who qualifies as an Owner) that results in a 20% or more change of ownership interest;
Any change in the general partner of a franchisee that is a general, limited or other partnership entity;
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if the franchisee is a partnership, any change in the general partner requires Alloy's prior written consent. Alloy emphasizes that the franchise agreement is based on the financial qualifications, experience, skills, and managerial qualifications of the franchisee. Therefore, Alloy retains the right to approve or deny any transfer of ownership or control.
Specifically, the FDD states that any change in the general partner of a franchisee that is a general, limited, or other partnership entity constitutes a transfer that requires Alloy's consent. This provision ensures that Alloy maintains control over who is managing and operating an Alloy franchise, even within a partnership structure.
This requirement is typical in franchising, as franchisors want to ensure that all franchisees meet their standards and are capable of running the business effectively. For a prospective Alloy franchisee, this means that if you are entering into a franchise agreement as a partnership, any changes to the general partners will need to be disclosed to and approved by Alloy. This could potentially delay or complicate changes to the partnership structure in the future.