Does the Alloy non-compete agreement apply if the franchisee sells their facility?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- You covenant that you will not, for a period of two years after the expiration or termination of this Agreement, or after the expiration of any Interim Period, regardless of the cause of termination, or within two years of the sale of the Facility or any interest in you, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or entity, own, manage, operate, maintain, engage in, consult with or have any interest in a Competing Business:
- a. At the premises of the former Facility;
- b. Within 15 miles of the Facility; or
- c. Within 15 miles of any other business or facility using the ALLOY System, whether franchised or owned by us or our affiliates.
For purposes of this Section 10.D, a Competing Business includes any facility or business which includes offering personal training services in a one-on-one or group setting.
- You agree that the length of time in subpart (3) will be tolled for any period during which you are in breach of the covenants or any other period during which we seek to enforce this Agreement. The parties agree that each of the foregoing covenants will be construed as independent of any other covenant or provision of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the non-compete agreement does apply if a franchisee sells their facility. Specifically, the franchisee agrees not to engage in any Competing Business for two years after the sale of the Alloy facility or any interest in the franchisee's business.
A "Competing Business" is defined as any facility or business offering personal training services in a one-on-one or group setting. This restriction applies at the former facility's premises, within 15 miles of the facility, or within 15 miles of any other business using the Alloy system, whether franchised or owned by Alloy or its affiliates.
This non-compete obligation extends to all Owners, guarantors, officers, directors, members, managers, partners, and holders of any ownership interest in the franchisee, as well as their immediate family members, including spouses and children. Alloy may require these individuals to sign a non-compete agreement. The duration of the non-compete period can be extended if the franchisee breaches the covenants or if Alloy seeks to enforce the agreement.