Does Alloy have the right to establish Facilities outside a franchisee's Designated Territory?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Franchise Agreement, we (and any affiliates that we periodically might have) have the right:
- (1) to establish and operate, and grant rights to other franchise owners to establish and operate, Facilities or similar businesses at any locations outside your Designated Territory and on any terms and conditions we deem appropriate;
- (2) merge with, acquire or become associated with ("Merger/Acquisition Activity") any businesses or facilities of any kind (including those in competition with ALLOY) under other systems and/or marks, which businesses and facilities may convert to or operate under the Marks and may offer or sell training services or related products that are the same as or similar to the services or products offered at or from the Franchised Business, and which may be located anywhere;
- (3) to engage in any other business activities not expressly prohibited by the Franchise Agreement, both within and outside your Designated Territory, and (4) to develop or franchise Special Site locations, which by their nature are unique and separate in character from sites generally developed as ALLOY facilities ("Special Sites"), and include, but are not limited to the following locations regardless of their location and their proximity to your Facility: (i) military bases; (ii) public transportation facilities (including airports); (iii) business or industry locations (e.g. manufacturing site, office building), or sports facilities; (iv) student unions or other similar buildings on college or university campuses; (v) malls or enclosed shopping centers; and (vi) community and special events.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy retains the right to establish and operate Facilities or similar businesses outside a franchisee's Designated Territory. Alloy can also grant these rights to other franchise owners. These Facilities can be established at any location and under any terms and conditions that Alloy deems appropriate. This means that while franchisees are granted a Designated Area, Alloy is not restricted from opening additional locations outside of that area, potentially creating competition for franchisees.
Alloy also has the right to engage in Merger/Acquisition Activity with any businesses, even those in competition with Alloy. These acquired businesses can convert to or operate under Alloy's trademarks and offer similar services or products as the franchised business. These businesses can be located anywhere, further emphasizing that Alloy's rights are not limited by a franchisee's Designated Territory. Alloy can also engage in any other business activities not expressly prohibited by the Franchise Agreement, both within and outside a franchisee's Designated Territory.
Furthermore, Alloy has the right to develop or franchise Special Site locations, which are unique and separate from typical Alloy facilities. These Special Sites include locations such as military bases, public transportation facilities, business or industry locations, sports facilities, college campuses, malls, and community events, regardless of their proximity to a franchisee's Facility. This provides Alloy with considerable flexibility in expanding its brand presence through non-traditional venues, which may or may not impact individual franchisees depending on the specific location and nature of these Special Sites.