What does Alloy have the right to collect and retain from manufacturers, suppliers, and distributors?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
pproval would not be in the best interests of the System.
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates based upon your purchases of products and services from manufacturers, suppliers, and distributors. We or our affiliates will have all of your right, title, and interest in and to any and all of these Allowances. We or our affiliates may collect and retain any or all of these Allowances without restriction (unless otherwise instructed by the manufacturer, supplier, or distributor). We may also choose to contribute these Allowances to the Brand Development Fund, but if we do so it does not reduce or eliminate your requirement to pay the
Brand Development Fee. For the fiscal year ended December 31, 2024, we collected $221,972 in Allowances, which was 5.48% of our overall revenue of $4,048,688, as reported in our audited financial sta
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy has the right to collect and retain any allowances, rebates, credits, incentives, or benefits offered by manufacturers, suppliers, and distributors based on a franchisee's purchases of products and services. These are collectively referred to as "Allowances." Alloy or its affiliates will possess all rights to these Allowances and can collect and retain them without restriction, unless the manufacturer, supplier, or distributor specifies otherwise. Alloy may also choose to contribute these Allowances to the Brand Development Fund, but this contribution does not reduce the franchisee's obligation to pay the Brand Development Fee. For the fiscal year ended December 31, 2024, Alloy collected $221,972 in Allowances, which represented 5.48% of their overall revenue of $4,048,688.
This policy means that while franchisees may be the ones making the purchases that trigger these Allowances, the financial benefits primarily accrue to Alloy. This could potentially impact a franchisee's profitability, as they do not directly benefit from these incentives. It is important for prospective franchisees to understand that these Allowances are not factored into their revenue or cost calculations.
Prospective franchisees should inquire about the typical range of Allowances generated by a franchise location and how Alloy uses the collected funds, particularly if they are contributed to the Brand Development Fund. Understanding the specific criteria and processes for how Alloy manages and potentially reinvests these Allowances can provide greater clarity on the overall financial dynamics of the franchise agreement. This information can help franchisees assess the potential impact on their business and make informed decisions.