Does Alloy require a transferee to assume the transferor's development obligations, including the payment of any remaining initial franchise fees, as a condition of approving a transfer of the Development Agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement is entered into by us with specific reliance upon your personal experience, skills and managerial and financial qualifications. Consequently, this Agreement, and your rights and obligations under it, are and will remain personal to you. You may only Transfer your rights and interests under this Agreement if you obtain our prior written consent and you transfer your rights and interests under the relevant Franchise Agreements for Facilities in the Development Territory as dictated by the circumstances. In this event, the transferee will be required, as a condition of approval of the transfer, to assume transferor's development obligations, including the payment of any remaining initial franchise fees. Accordingly, the assignment terms and conditions of the Franchise Agreements will apply to any Transfer of your rights and interests under this Agreement. As used in this Agreement, the term "Transfer" means any sale (including installment sale), assignme
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee seeks to transfer their rights and interests under the Development Agreement, the transferee will be required to assume the transferor's development obligations, including the payment of any remaining initial franchise fees, as a condition of approval of the transfer. Alloy enters into the agreement with specific reliance upon the franchisee's personal experience, skills, and managerial and financial qualifications.
This condition ensures that the new developer is fully committed to fulfilling the original development schedule and financial commitments. The term "Transfer" means any sale (including installment sale), assignment.
This requirement protects Alloy's interests by ensuring that any new developer is qualified and financially capable of meeting the development obligations. It also aligns with standard franchising practices, where franchisors typically want to maintain control over who operates and develops their brand.