If a franchisee wants to transfer their rights and interests under the Alloy Development Agreement, must they also transfer their rights and interests under the relevant Franchise Agreements for Facilities in the Development Territory?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement is entered into by us with specific reliance upon your personal experience, skills and managerial and financial qualifications. Consequently, this Agreement, and your rights and obligations under it, are and will remain personal to you. You may only Transfer your rights and interests under this Agreement if you obtain our prior written consent and you transfer your rights and interests under the relevant Franchise Agreements for Facilities in the Development Territory as dictated by the circumstances. In this event, the transferee will be required, as a condition of approval of the transfer, to assume transferor's development obligations, including the payment of any remaining initial franchise fees. Accordingly, the assignment terms and conditions of the Franchise Agreements will apply to any Transfer of your rights and interests under this Agreement. As used in this Agreement, the term "Transfer" means any sale (including installment sale), assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation, reorganization, combination, share exchange, transfer by operation of law or otherwise, or transfer as a result of a death, disability, divorce or insolvency, whether direct or indirect, voluntary or involuntary, of this Agreement or any interest in it, or any rights or obligations arising under it, or of any material portion of your assets, or of any interest in you.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their rights and interests under the Development Agreement, they must also transfer their rights and interests under the relevant Franchise Agreements for Facilities within the Development Territory. Alloy enters into the Development Agreement with specific reliance on the franchisee's personal experience, skills, and managerial and financial qualifications, making the agreement personal to the franchisee.
To transfer the Development Agreement, the franchisee must obtain Alloy's prior written consent. The transferee will be required to assume the transferor's development obligations, including the payment of any remaining initial franchise fees. The assignment terms and conditions of the Franchise Agreements will apply to any transfer of rights and interests under the Development Agreement.
The term "Transfer" is broadly defined, encompassing various methods of transferring the agreement or interests within it, including sale, assignment, gift, pledge, mortgage, transfer by bankruptcy or judicial order, merger, consolidation, reorganization, share exchange, transfer by operation of law, or transfer resulting from death, disability, divorce, or insolvency. This definition covers both direct and indirect, voluntary and involuntary transfers of the agreement, any interest in it, rights or obligations arising under it, a material portion of the franchisee's assets, or any interest in the franchisee.