What obligations does an Alloy franchisee have regarding location approval as described in Item 8, and how does this relate to the territory granted in Item 12?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 12: TERRITORY]
We and our affiliates may sell products or offer services under the Proprietary Marks within and outside your Designated Territory through any method of distribution other than a dedicated Alloy Facility, including sales or web-based fitness instruction through channels of distribution such as the internet, catalog sales, telemarketing or other direct marketing sales (together, "alternative distribution channels"). You may not use alternative distribution channels to make sales outside or inside your Designated Territory and you will not receive any compensation for our sales through alternative distribution channels. We or one of our affiliates will fulfill all orders for merchandise placed through our website, and you will have no right to the revenue from these orders, even if the order originated from or was delivered to an address in your Designated Territory.
We have not established other franchises or company-owned outlets or another distribution channel selling or leasing similar products or services under a different trademark. We describe earlier in this Item 12 what we may do within and outside of your Designated Territory.
Neither we nor any parent or affiliate has established, or presently intends to establish, other franchised or company-owned businesses which provide similar products or services under a different trade name or trademark, but we reserve the right to do so in the future, without first obtaining your consent.
Area Development Agreement
If you enter into an Area Development Agreement, you will receive a Development Territory within which you will have certain rights to develop multiple Alloy Facilities. Although you will receive a Development Territory with certain protected rights to develop multiple Alloy Facilities, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control. The size of the Development Territory will depend on the number of Facilities you commit to develop, and may be described in terms of contiguous zip codes, street or county boundaries, or other similar methods, and may be depicted on a map. If you meet the Minimum Performance Schedule, comply with all other provisions described in the Area Development Agreement and otherwise comply with the provisions of each related Franchise Agreement, we will not establish or license others to establish a Facility within the Development Territory assigned to you. You maintain your rights to your Development Territory even if the population increases.
[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING]
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING
Except as listed below, Alloy Personal Training, LLC is not required to provide you with any assistance.
Pre-Opening Obligations
Area Development Agreement: Under the Area Development Agreement, we will grant to you rights to a Development Territory within which you will establish and operate an agreedupon number of Facilities under separate Franchise Agreements. (Area Development Agreement – Section 2.A.)
Franchise Agreement: Before you open your Franchised Business, we will:
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- Consult with you on the location for your Franchised Business, which must be accepted by us. Your site must meet our criteria for population and/or median income in the surrounding area, size and cost of the facility that you select and other similar factors, including
our business judgment. We may reject your proposed location in our sole discretion. Our acceptance only means that the site meets our minimum requirements for a Franchised Business (Franchise Agreement – Section 5.A).
[Item 23: RECEIPTS]
GRANT OF LICENSE
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- The following provisions control with respect to the license granted hereunder:
- A. Facility. We grant to you the right and license to establish and operate a Facility identified by the ALLOY Trademarks or such other marks as we may direct, at the location identified on the Data Sheet, which location must be designated within 90 days from the date of this Agreement (the "Authorized Location"). The Authorized Location must be located within the area defined in the Data Sheet as the "Designated Area." When a location has been designated by you and approved by us, it will become part of this subparagraph 2.A as if originally stated. If a Facility is not "under control" within 180 days from the date of this Agreement (as defined in subparagraph 5.A), we may grant you an extension of time to locate a Facility or terminate this Agreement. You accept the license and undertake the obligation to operate the Facility using the Trademarks and the System in compliance with the terms and conditions of this Agreement.
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees must have their chosen location approved by Alloy. Before opening, Alloy consults with franchisees on the location, which Alloy must accept. The site must meet Alloy's criteria for population, median income, facility size and cost, and other factors based on Alloy's business judgment. Alloy can reject a proposed location at its sole discretion; acceptance only indicates the site meets minimum requirements. The franchisee must designate the location within 90 days of signing the Franchise Agreement, and the location must be within the Designated Area.
Item 12 states that Alloy and its affiliates can sell products or services under the trademarks both inside and outside the franchisee's Designated Territory through methods other than a dedicated Alloy Facility, such as internet sales or direct marketing. The franchisee cannot use these alternative channels to sell outside or inside their Designated Territory and will not receive compensation for Alloy's sales through these channels.
For franchisees entering into an Area Development Agreement, Alloy grants a Development Territory for establishing multiple Alloy Facilities. While franchisees receive certain protected rights to develop these facilities, the territory is not exclusive, meaning franchisees may face competition from other franchisees, company-owned outlets, other distribution channels, or competitive brands controlled by Alloy. The size of the Development Territory depends on the number of Facilities the franchisee commits to develop and can be defined by zip codes, street boundaries, or other methods. If the franchisee meets the Minimum Performance Schedule and complies with the Area Development and Franchise Agreements, Alloy will not establish or license others to establish a Facility within the assigned Development Territory.