Who is responsible for lease obligations incurred after the effective date of the assignment of the lease to Alloy?

According to Alloy's 2025 Franchise Disclosure Document, Alloy is responsible for lease obligations incurred after the effective date of the lease assignment. Specifically, if Alloy chooses to assume the lease, it will be responsible for all lease obligations from the date of assignment, as agreed upon with the landlord. This means that once the lease is officially transferred to Alloy, the company, not the franchisee, is legally bound to fulfill the terms of the lease, including rent payments and other responsibilities outlined in the lease agreement.

This assumption of lease obligations by Alloy provides a significant benefit to the franchisee. It reduces the franchisee's long-term financial risk associated with the property lease. If the franchisee's business encounters difficulties or if they decide to sell the franchise, they are not burdened with the remaining lease obligations after the assignment. This arrangement can make the Alloy franchise opportunity more attractive to potential buyers, as it limits their exposure to lease-related liabilities.

However, it's important to note that the landlord and Alloy must agree on the effective date of the assignment. This implies that the transfer of lease obligations is not automatic and requires a formal agreement. Additionally, the landlord retains the right to approve the assignment, ensuring that the new tenant (Alloy) is creditworthy and meets their standards. Franchisees should ensure they understand the process and requirements for lease assignment to Alloy to facilitate a smooth transition if the franchise agreement is terminated.