What is the minimum annual Gross Sales required for an Alloy franchise in the second year of operation?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
e minimum annual Gross Sales for that year. The required minimum annual Gross Sales for the first year of operation from the first day you open the Facility for business is $240,000. The second year will be the 12 month period beginning with your first anniversary date from the opening of the facility (this 12 month period is referred to as Year 2). The minimum annual Gross Sales for Year 2 and for each following year through the end of the initial term of the Franchise Agreement is $300,000.
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- Cooperatives will include all Facilities in a designated geographic area, whether owned by us, our affiliates or our franchisees. Each Facility has one vote in the cooperative, but no one Facility or commonly controlled group of Facilities will have more than 25% of the total vote. This limit on voting power includes franchisor or affiliate outlets. No cooperatives have been established as of the date of this Disclosure Document.
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- The Daily Noncompliance Fee is currently $100 per day that you remain out of compliance with the Franchise Agreement or any mandatory standard or procedure. The Daily Noncompliance Fee is payable via ACH immediately upon 24 hours' notice, and we reserve the right to continue charging it until you cure any applicable default. The Daily Fee is in addition to, and not in lieu of, any rights we have under the Franchise Agreement (including termination as set forth in the Franchise Agreement) and is subject to change at any time.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the minimum annual Gross Sales required for an Alloy franchise in its second year of operation is $300,000. The second year is defined as the 12-month period beginning with the first anniversary of the facility's opening. This minimum sales requirement continues for each subsequent year through the initial term of the Franchise Agreement.
Failing to meet the minimum annual Gross Sales has consequences for Alloy franchisees. The first time a franchisee fails to achieve the minimum, they will receive additional on-site training and assistance from Alloy representatives, but at the franchisee's expense, including per diem fees and expense reimbursement for the representative. If the franchisee fails to meet the minimum a second time, Alloy may require additional on-site training and assistance again. A third failure can result in the termination of the Franchise Agreement without an opportunity to correct the default.
Additionally, for any year a franchisee fails to achieve the minimum annual Gross Sales, they must pay a royalty fee shortfall. This shortfall is calculated as 7% of the difference between the actual Gross Sales for the year and the $300,000 minimum. Alloy also retains the right to reduce the minimum annual Gross Sales requirement based on an individual franchisee's circumstances, but is not obligated to grant similar modifications to other franchisees.