What information about the Alloy facility and its operations can Alloy request from the franchisee for a proposed transfer?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ur prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer will be subject to our prior written approval, which approval will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfer fee provided for in subparagraph 11.C.
- C. Transfer Fee. You must pay to us a transfer fee in the amount of $10,000. The transfer fee is nonrefundable even if, for any reason, the proposed transfer does not occur.
- D. Conditions of Transfer. We condition our consent to any proposed transfer, whether to an individual, a corporation, a partnership or any other entity upon the following:
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- Assignee Requirements. The assignee must meet all of our then-current requirements for our ALLOY franchise program we are offering at the time of the proposed transfer and sign our then-current form of franchise agreement modified to reflect the term remaining under this Agreement.
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- Payment of Amounts Owed. All amounts owed by you to us, or any of our affiliates, your suppliers or any landlord for the Facility premises and Facility, or upon which we or any of our affiliates have any contingent liability must be paid in full.
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- Reports. You must have provided all required reports to us in accordance with subparagraphs 9.H and I.
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- Modernization. You must have complied with the provisions of subparagraph 5.E.
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- Guarantee. In the case of an installment sale for which we have consented to you or any Owner retaining a security interest or other financial interest in this Agreement or the business operated thereunder, you or such Owner, and the guarantors, are obligated to guarantee the performance under this Agreement until the final close of the installment sale or the termination of such interest, as the case may be.
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Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee proposes to transfer their franchise, they must immediately notify Alloy and promptly submit an application for consent to transfer, along with any other required documents and information. The application must specify whether the franchisee or an Owner intends to retain a security interest in the property being transferred; however, retaining or creating a security interest requires Alloy's prior written consent under conditions acceptable to them. Any agreement used for the transfer is subject to Alloy's prior written approval, which will not be unreasonably withheld.
Alloy conditions its consent to any proposed transfer, regardless of whether the assignee is an individual, corporation, partnership, or other entity, on several factors. The assignee must meet all of Alloy's then-current requirements for its franchise program at the time of the proposed transfer and must sign Alloy's then-current form of franchise agreement, modified to reflect the remaining term of the original agreement. Additionally, all amounts owed by the franchisee to Alloy, its affiliates, suppliers, or any landlord for the Facility premises and Facility, or upon which Alloy or its affiliates have any contingent liability, must be paid in full.
The franchisee must also have provided all required reports to Alloy as specified in subparagraphs 9.H and I of the agreement and must have complied with the modernization provisions outlined in subparagraph 5.E. These conditions ensure that the assignee is qualified, all financial obligations are settled, and the facility meets Alloy's standards before the transfer can proceed.
Failure to obtain Alloy's prior written consent or otherwise comply with the terms of the agreement renders any attempted transfer void. In such cases, the franchisee's interest in the agreement will be considered voluntarily abandoned, giving Alloy the right to either deem the franchisee in default and terminate the agreement or collect a transfer fee equal to two times the standard transfer fee, which is normally $10,000. The transfer fee is nonrefundable, regardless of whether the proposed transfer is completed.