What must I do to maintain my rights to the Alloy Development Territory under the Area Development Agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
To maintain your rights under the Area Development Agreement you must have open and in operation the cumulative number of Facilities stated on the Minimum Performance Schedule by the dates agreed upon in the Minimum Performance Schedule. Failure to do so will be grounds for either a loss of territorial exclusivity or a termination of the Area Development Agreement. We will approve the site for each Facility that you develop under the Area Development Agreement as set forth in the Franchise Agreement for each Facility. Below is a sample Minimum Performance Schedule for an Area Development Agreement for three Facilities.
| Facility Number | Date by Which Franchise Agreement Must be Signed | Date by Which the Facility Must be Opened and Continuously Operating for Business in the Territory | Cumulative number of Facilities Required to be Open and Continuously Operating for Business in the Development Territory as of the Date in Preceding Column |
|---|---|---|---|
| 1 | Effective Date of the Agreement | Within 1 year of the Effective Date of the Agreement | 1 |
| 2 | Within 1 year after the Effective Date of the Agreement. | Within 2 years of the Effective Date of the Agreement | 2 |
| 3 | Within 2 years after the Effective Date of the Agreement | Within 3 years of the Effective Date of this Agreement | 3 |
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, to maintain your rights under the Area Development Agreement, you must have the required number of Alloy facilities open and operating by the dates outlined in the Minimum Performance Schedule. Failure to meet this schedule can result in the loss of territorial exclusivity or termination of the Area Development Agreement.
For example, a sample Minimum Performance Schedule for an Area Development Agreement for three facilities states that the first facility must be open and continuously operating within one year of the agreement's effective date. The second facility must be open within two years, and the third within three years of the effective date. These facilities must be continuously operating.
Alloy will approve the site for each facility developed under the Area Development Agreement, as detailed in the Franchise Agreement for each facility. This approval process ensures that the chosen locations meet Alloy's standards. Meeting the Minimum Performance Schedule and complying with the Area Development Agreement and related Franchise Agreements ensures that Alloy will not establish or license others to establish a facility within your assigned Development Territory.