Who has the right to select legal counsel for Alloy's interests in the event of a Franchise Claim?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
If a Franchise Claim is made against us or our affiliates, we reserve the right in our sole judgment to select our own legal counsel to represent our interests, at your cost.
- B.
Should one or more clauses of this Agreement be held void or unenforceable for any reason by any court of competent jurisdiction, such clause or clauses will be deemed to be separable in such jurisdiction and the remainder of this Agreement is valid and in full force and effect and the terms of this Agreement must be equitably adjusted so as to compensate the appropriate party for any consideration lost because of the elimination of such clause or clauses.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, in the event of a Franchise Claim against Alloy or its affiliates, Alloy reserves the right to select its own legal counsel to represent its interests. The franchisee will bear the cost of this legal representation.
A "Franchise Claim" includes claims arising from death, personal injury, property damage, defects in a Facility, or the franchisee's employment practices. This means that if a customer or employee sues Alloy (or its affiliates) due to something related to the franchisee's Alloy business, Alloy can choose its own lawyers, but the franchisee is responsible for paying the legal fees.
This arrangement is not uncommon in franchising, as it protects the franchisor's brand and reputation. However, it places a potentially significant financial burden on the franchisee. A prospective Alloy franchisee should consider this potential expense when evaluating the franchise opportunity and may want to discuss with Alloy what insurance coverage is required to cover such claims.