When are sales-based royalties, brand fund fees, and technology fees payable to Alloy?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
of set forth on the Data Sheet. The Initial Franchise Fee is a lump sum payment and is due when you sign this Agreement. The Initial Franchise Fee is earned upon receipt and, except as noted below, is nonrefundable.
- B. Royalty Fee. In addition to the Initial Franchise Fee, during the full term of this Agreement, or any Interim Period, and in consideration of the rights granted to you, you must pay to us a weekly Royalty Fee equal to 7% of Gross Sales.
- C. Brand Development Fund Fee. You must pay to us a weekly Brand Development Fund Fee in an amount equal to 2% of Gross Sales. The Brand Development Fund Fee is separate from any local marketing requirements. The Brand Development Fund Fees are not held by us in trust and will be spent in accordance with subparagraph 8.A of this Agreement.
- D. Technology Fee. You must pay to us each week a technology fee (the "Technology Fee") in an amount set forth in the Data Sheet. We will use these fees to fund new and ongoing technology initiatives, as well as technical support and database administration, internet marketing and various corporate technology services. We reserve the right to increase the Technology Fee by an amount of no more than 30% per calendar year in order to recover in part any increase in costs for such services. The monies will be administered by us. The fee will begin when the software is set up and initiated to coincide with training.
- E. Daily Noncompliance Fee.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, franchisees must pay a weekly royalty fee equal to 7% of gross sales, a weekly brand development fund fee equal to 2% of gross sales, and a weekly technology fee in an amount set forth in the Data Sheet. The technology fee will begin when the software is set up and initiated to coincide with training. These fees are ongoing during the full term of the Franchise Agreement or any Interim Period.
In addition to the weekly fees, Alloy franchisees must submit a report of their gross sales with respect to the preceding week. This report must be submitted on the day and in the form and content as Alloy periodically prescribes.
If a franchisee fails to make timely payments, Alloy may impose a service charge of $100 for each delinquent report or payment. A payment is considered delinquent if it is not received on or before the due date, or if there are insufficient funds in the franchisee's bank account to cover the payment. These service charges are intended to compensate Alloy for increased administrative and management costs due to late payment.