What is the required minimum annual Gross Sales for an Alloy franchise during the second year of operation?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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For any year you fail to achieve the minimum annual Gross Sales, you must pay any shortfall of royalty fees for each failure to achieve the minimum annual Gross Sales. The shortfall amount equals 7% of the difference between your actual Gross Sales for the year and the minimum annual Gross Sales for that year. The required minimum annual Gross Sales for the first year of operation from the first day you open the Facility for business is $240,000. The second year will be the 12 month period beginning with your first anniversary date from the opening of the facility (this 12 month period is referred to as Year 2). The minimum annual Gross Sales for Year 2 and for each following year through the end of the initial
Source: Item 6 — OTHER FEES (FDD pages 15–20)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees must meet a minimum annual Gross Sales target. For the second year of operation, which Alloy defines as the 12-month period starting on the first anniversary of the facility's opening, the minimum required Gross Sales is $300,000.
If an Alloy franchisee fails to meet the $300,000 minimum annual Gross Sales in the second year, they must pay a shortfall amount to Alloy. This shortfall is calculated as 7% of the difference between the franchisee's actual Gross Sales and the $300,000 minimum. For example, if an Alloy franchise has Gross Sales of $250,000 in its second year, the shortfall would be 7% of the $50,000 difference, resulting in a payment of $3,500 to Alloy.
This requirement has significant implications for prospective Alloy franchisees. It sets a clear performance benchmark that franchisees must strive to achieve to avoid additional costs. Franchisees should carefully consider their market potential, operating expenses, and sales projections to determine if they can realistically meet this minimum sales threshold. Failure to do so could impact their profitability and overall financial stability. It is common in the franchise industry to have minimum sales requirements to ensure the financial viability of both the franchisee and the franchisor.