Does the Alloy non-compete agreement apply during an Interim Period?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- You covenant that during the term of this Agreement or during any Interim Period you will not, 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 any Competitive Business.
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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.
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 is in effect during any Interim Period. An Interim Period occurs if a franchisee does not renew their agreement but continues to operate the franchise after the original agreement expires. Alloy has the option to treat this situation as either an expired agreement or as a month-to-month extension (the Interim Period). If Alloy chooses the latter, all obligations, including the non-compete, remain in effect.
Specifically, during the Interim Period, the franchisee cannot directly or indirectly own, manage, operate, or have any interest in a Competitive Business. This restriction applies to the franchisee, their owners, guarantors, officers, directors, members, managers, partners, and their immediate family members. Alloy may also require managers and other individuals to sign a non-compete agreement.
After the Interim Period or the termination of the agreement, the franchisee is restricted from engaging in a Competing Business for two years. This restriction applies at the former facility's premises, within 15 miles of the facility, or within 15 miles of any other Alloy business. A Competing Business is defined as any facility offering personal training services in a one-on-one or group setting. The duration of this post-term non-compete can be extended if the franchisee breaches the agreement or if Alloy seeks to enforce it.