What payments are Alloy franchisees obligated to pay promptly when due?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay the fees described below and comply with the following provisions:
- A. Initial Franchise Fee. You must pay us an Initial Franchise Fee in the amount of set forth on the Data Sheet. The Initial Franchise Fee is a lump sum payment and is due when you sign this Agreement.
You also must have satisfied, on a timely basis, all monetary and other material obligations under the Franchise Agreements for all of your existing Facilities.
You must pay to us a transfer fee in the amount of $10,000.
The transfer fee is nonrefundable even if, for any reason, the proposed transfer does not occur.
We have the right to designate local or regional advertising markets and if designated, you must participate in and contribute to any group or cooperative advertising and marketing programs in your designated local or regional market.
If established, you must contribute to the amount we designate (or the cooperative designates if a cooperative is established).
We reserve the right to charge you our thencurrent site evaluation fee for each on-site evaluation we conduct.
Item 5: Due to the financial condition of the Franchisor, the South Dakota Securities Regulation Office has required a financial assurance. Therefore, all initial fees and payments owed by franchisees to the franchisor under a franchise agreement shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees are obligated to pay several fees promptly. These include the Initial Franchise Fee, which is a lump sum payment due when signing the Franchise Agreement.
Franchisees must also satisfy all monetary obligations under the Franchise Agreements for their existing facilities on a timely basis. If a franchisee seeks to transfer their franchise, they must pay a transfer fee of $10,000, which is nonrefundable, even if the transfer does not occur.
Additionally, if Alloy designates local or regional advertising markets, franchisees must participate in and contribute to any group or cooperative advertising and marketing programs in their designated market, contributing the amount Alloy or the cooperative designates. Alloy also reserves the right to charge franchisees their current site evaluation fee for each on-site evaluation conducted.
It is important to note that in South Dakota, due to Alloy's financial condition, all initial fees and payments owed by franchisees are deferred until Alloy completes its pre-opening obligations under the franchise agreement. Prospective franchisees should carefully review the Franchise Agreement and related addenda to fully understand all payment obligations and conditions.