How are Royalty Fees for an Alloy franchise calculated?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
was $110,000-$180,000.
ITEM 6 OTHER FEES
| Name of Fee (1) | Amount | Date Due | Remarks |
|---|---|---|---|
| Royalty Fee (2) | 7% of Gross Sales | Payable weekly on Wednesday (unless Wednesday is not a business day, then it is due on the next business day) | Royalty Fees are calculated based on Gross Sales for the previous week ending Sunday. Amounts due will be withdrawn by EFT from your designated bank account. |
| Brand Development Fund Fee | 2% of Gross Sales | Payable weekly at the same time and in the same manner as the weekly Royalty Fee | The Brand Development Fund is described in Item 11 |
| Technology Fee | $220 | Payable weekly at the same time and in the same manner as the weekly Royalty Fee. We have the right to change the billing schedule to bi-weekly. | The Technology Fee is for use of a CRM and POS (point of sale system), Scheduler and the Alloy App and reporting dashboard; Lead Management and Marketing Campaign system and bolt-on applications, website development, SEO, email service, Fit Radio, Learning Management System, ProfitKeeper financial system, support and maintenance. The weekly amount may increase as technology changes, although we do not anticipate that the Technology Fee will not increase by more than 30% annually. |
| Local Marketing | 2-8% of Gross Sales | Recommended to be spent monthly until you are at capacity. | Payable to your local marketing suppliers. Any marketing you wish to use must first be approved by us |
| Advertising Groups/Cooperat ives (3) | 1% of Gross Sales, unless we or the cooperative | As determined by the members | Any amounts you contribute to a local or regional advertising group or |
| Name of Fee (1) | Amount | Date Due | Remarks |
|---|---|---|---|
| members (if a cooperative is formed) approve a higher amount | cooperative will count toward your local marketing requirement. |
Source: Item 6 — OTHER FEES (FDD pages 15–20)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the Royalty Fee is calculated as 7% of Gross Sales. This fee is payable weekly on Wednesday, unless Wednesday is not a business day, in which case it is due on the next business day. The Royalty Fees are based on Gross Sales for the previous week, ending on Sunday. Alloy will withdraw the amounts due via Electronic Funds Transfer (EFT) from the franchisee's designated bank account.
'Gross Sales' encompasses the total gross revenue from all products and services sold at or through the Alloy Facility. This includes various fees such as session fees, membership fees, initiation and enrollment fees, processing fees, renewal fees, corporate/third party payer fees, monthly dues, and any revenue generated during pre-sales. It also includes fees for optional services like personal training and small group training, fees charged to non-members, and revenue from merchandise sales. Sales taxes, use taxes, and other similar taxes collected from customers and remitted to the appropriate taxing authority are deducted from Gross Sales before calculating the royalty fee.
Each Monday, franchisees must provide Alloy with a report of their Alloy Facility's Gross Sales for the previous week. Alloy may also electronically access the franchisee's computer system to obtain this information, but the franchisee is still required to submit the report. Additionally, if any state imposes a sales or other tax on the Royalty Fees, Alloy has the right to collect this tax from the franchisee. Alloy also requires a minimum annual Gross Sales, and if this is not achieved, the franchisee must pay the shortfall of royalty fees. The required minimum annual Gross Sales for the first year of operation is $240,000, and for the second year and each following year through the end of the initial term of the Franchise Agreement, it is $300,000.