Does Alloy have to provide a reason if they withhold consent to a transfer?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
cility, or in any communication media or any form of advertising, any information relating to the sale of the Facility or the rights under this Agreement, without our prior written consent.
- B. Consent to Transfer. We will not unreasonably withhold our consent to transfer, provided we determine that all of the conditions described in this Paragraph 11 have been satisfied. Application for our consent to a transfer and tender of the right of first refusal provided for in subparagraph 11.F must be made by submission of our form of application for consent to transfer, which must be accompanied by the documents we request and other required information. The application must indicate whether you or an Owner proposes to retain a security interest in the property to be transferred. No security interest may be retained or created, however, without our prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer will be subject to our prior written approval, which approval 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 transfer fee provided for in subparagraph 11.C.
- C. Transfer Fee. 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.
- D. Conditions of Transfer. We condition our consent to any proposed transfer, whether to an individual, a corporation, a partnership or any other entity upon the following:
-
- Assignee Requirements. The assignee must meet all of our then-current requirements for our ALLOY franchise program we are offering at the time of the proposed transfer and sign our then-current form of franchise agreement modified to reflect the term remaining under this Agreement.
-
- Payment of Amounts Owed. All amounts owed by you to us, or any of our affiliates, your suppliers or any landlord for the Facility premises and Facility, or upon which we or any of our affiliates have any contingent liability mu
-
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy will not unreasonably withhold consent to a transfer if all the conditions described in Paragraph 11 of the franchise agreement are satisfied.
To initiate a transfer, a franchisee must submit Alloy's form of application for consent to transfer, accompanied by requested documents and information, including whether the franchisee or an owner proposes to retain a security interest in the property to be transferred. Alloy's approval is required for any agreement used in connection with a transfer, and this approval will not be unreasonably withheld.
Several conditions must be met for a transfer to be approved. The assignee must meet Alloy's current requirements for franchisees and sign the current franchise agreement. All amounts owed to Alloy, its affiliates, suppliers, or the landlord must be paid in full. The franchisee must have provided all required reports to Alloy and complied with modernization provisions. Additionally, any security interest in the assets requires Alloy's consent and must meet their conditions.
If a franchisee attempts to transfer without Alloy's prior written consent or compliance with the agreement terms, the transfer will be void. In such cases, the franchisee's interest in the agreement will be considered voluntarily abandoned, giving Alloy the right to either terminate the agreement or collect a transfer fee equal to $20,000, which is two times the standard transfer fee of $10,000.