What are the implications of Alloy not offering financing, as stated in Item 10, for a franchisee's ability to adapt to changing market conditions?

Based on the 2025 Franchise Disclosure Document, Item 10 includes a question for prospective Alloy franchisees regarding their opportunity to discuss the benefits and risks of operating an Alloy franchise with professional advisors. This question does not directly address whether Alloy offers financing.

However, Item 1 of the Alloy FDD states that as a franchisee, you must have at all times sufficient working capital and liquidity (including cash and cash equivalents) to develop and operate your Facility without interruption. This requirement highlights the importance of a franchisee's financial stability. Without franchisor-provided financing, franchisees must independently secure funding through personal savings, loans, or other external sources. This can be a significant hurdle, especially for those with limited access to capital. Franchisees need to carefully assess their financial resources and explore all available funding options to ensure they can meet Alloy's financial requirements.

The absence of direct financing from Alloy places the onus on the franchisee to manage financial risks and adapt to market changes. Franchisees must be prepared to handle economic downturns, unexpected expenses, and fluctuations in revenue without relying on the franchisor for financial assistance. This necessitates sound financial planning, budgeting, and access to alternative funding sources. While Alloy provides a System that includes specific equipment, training, and support, the financial responsibility for navigating market conditions rests solely with the franchisee.