What is the required procedure for an Alloy franchisee to terminate the Franchise Agreement due to a material breach by the franchisor?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Minnesota law provides franchisees with certain termination and nonrenewal rights. As of the date of this Franchise Agreement, Minn. Stat. Sec. 80C.14, Subd. 3, 4 and 5 require, except in certain specified cases, that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for nonrenewal of the franchise agreement.
California Business & Professions Code Sections 20000 through 20043 provide rights to you concerning termination, transfer or nonrenewal of a franchise. If the franchise agreement contains a provision that is inconsistent with the law, the law will control.
Your rights upon termination and non-renewal are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 51–56)
What This Means (2025 FDD)
The 2025 Alloy FDD includes information regarding termination and non-renewal rights for franchisees in specific states, but it does not provide a comprehensive procedure for a franchisee to terminate the Franchise Agreement due to a material breach by Alloy.
For franchisees in Minnesota, the FDD states that Minnesota law requires that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for nonrenewal of the franchise agreement, except in certain specified cases. For franchisees in California, the FDD mentions that California Business & Professions Code Sections 20000 through 20043 provide rights to franchisees concerning termination, transfer, or nonrenewal of a franchise, and if the franchise agreement contains a provision that is inconsistent with the law, the law will control. Similarly, for franchisees in Illinois, the FDD indicates that rights upon termination and non-renewal are set forth in sections 19 and 20 of the Illinois Franchise Disclosure Act.
Because the procedure for termination due to a material breach is not fully detailed in the FDD, it is important that prospective Alloy franchisees carefully review the Franchise Agreement, paying close attention to the specific termination clauses. They should also seek legal counsel to fully understand their rights and obligations under the agreement and applicable state laws. Specifically, franchisees should ask Alloy about what constitutes a material breach by the franchisor and what steps a franchisee must take to formally notify Alloy of the breach and initiate the termination process.