What is the penalty if an Alloy franchisee attempts a transfer without consent?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
val will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfe
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee attempts to transfer their interest in the franchise agreement or the Alloy facility without obtaining prior written consent from Alloy, or if the transfer does not comply with the terms of the agreement, there are significant consequences. The attempted transfer will be considered void, and the franchisee's interest in the agreement will be treated as voluntarily abandoned.
In such a scenario, Alloy has the right to choose one of two options. First, Alloy can deem the franchisee in default of the agreement and subsequently terminate the agreement. Alternatively, Alloy can demand that the franchisee and any guarantors pay a transfer fee equal to two times the standard transfer fee.
The standard transfer fee, as outlined in subparagraph 11.C, is $10,000. Therefore, if Alloy elects to collect the penalty transfer fee, the franchisee would be liable for $20,000. This fee is in addition to any other potential damages or costs Alloy might incur as a result of the unauthorized transfer. It is important to note that the transfer fee is nonrefundable, regardless of whether the proposed transfer ultimately occurs.