Is Alloy permitted to engage in Merger/Acquisition Activity with businesses that compete with Alloy?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
ectly solicit customers outside your Designated Area. We may establish from time to time written guidelines regarding the territorial scope of your marketing activities. You agree to comply with any such guidelines.
We retain all rights that are not expressly granted to you under this Agreement. Further, we and our affiliates may, among other things, on any terms and conditions we deem advisable, without compensation to any franchisee, and without granting you any rights therein:
- (i) establish and/or license others to establish franchised or company-owned or affiliate-owned Facilities at any location, regardless of the proximity of such facilities to your Designated Area;
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy and its affiliates retain the right to engage in Merger/Acquisition Activity with businesses of any kind, including those that compete with Alloy. This activity can occur under any terms and conditions Alloy deems advisable, without providing compensation to any franchisee. These acquired businesses may then operate under Alloy's trademarks and offer similar training services or products. These businesses can be located anywhere.
This means that Alloy retains considerable freedom to expand its brand through mergers and acquisitions, even with direct competitors. For a franchisee, this implies that the competitive landscape could shift due to Alloy acquiring existing businesses that then become Alloy-branded facilities. This could increase competition in a franchisee's area, depending on the location of the acquired businesses.
Furthermore, Alloy and its affiliates can sell and distribute services and products, whether the same or different from those offered under the Alloy system, through franchised businesses or any other distribution method, using trademarks different from Alloy's. This broad right allows Alloy to diversify its offerings and distribution channels without compensating franchisees, potentially impacting a franchisee's market share or revenue streams.