Does the Alloy personal guarantee require the franchisor to pursue remedies against the franchisee before holding the guarantor liable?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Alloy Personal Training, LLC (the "Company") was formed on May 16, 2019, as a Georgia limited liability company, to sell franchises pursuant to a non-exclusive license agreement dated August 1, 2019, between the Company and Alloy Personal Training Solutions, LLC (the "Licensor"), an entity related to the Company by common ownership and control. Pursuant to the Company's standard franchise agreement, franchisees will operate a business which offers customers personal training in a group setting delivered by certified instructors under the name "Alloy Personal Training." Customers are provided with individualized training programs that are conducted in small groups.
The Company is a limited liability company, and therefore, the member is not liable for the debts, obligations or other liabilities of the Company, whether arising in contract, tort or otherwise, unless the member has signed a specific guarantee.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
Based on the 2025 FDD, the Alloy FDD does not explicitly state whether Alloy is required to pursue remedies against the franchisee before holding the guarantor liable under a personal guarantee. However, Note 1 within Item 23 addresses the liability of members within the LLC structure.
According to Note 1, because Alloy is a limited liability company, the member is typically not liable for the debts, obligations, or other liabilities of the company unless the member has signed a specific guarantee. This implies that if a member has signed a personal guarantee, they can be held liable for the company's debts.
Since the FDD does not specify the conditions or order of actions required to enforce a personal guarantee, it is important that a prospective Alloy franchisee consult with a legal expert to fully understand the terms and conditions of any personal guarantee required by Alloy. This will help clarify the extent of the guarantor's liability and the circumstances under which Alloy can pursue action against the guarantor.