What is the significance of the 'PRINCIPAL ACKNOWLEDGMENT' section in the Alloy FDD?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Schedule E to the Franchise Agreement
ACKNOWLEDGMENT ADDENDUM TO ALLOY FRANCHISE AGREEMENT
THIS ACKNOWLEDGEMENT ADDENDUM DOES NOT APPLY TO CANDIDATES LOCATED IN OR BUSINESSES TO BE LOCATED IN ANY OF THE FOLLOWING FRANCHISE REGISTRATION STATES: CA, HI, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI.
As you know, you and we are entering into a Franchise Agreement for the operation of an ALLOY franchise. Please review each of the following questions carefully and provide honest responses to each question.
**Acknowledgments and Representations
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to the 2025 Alloy FDD, the 'Acknowledgment Addendum' is a document that franchisees and area developers sign to acknowledge certain aspects of their agreement with Alloy. However, its use is restricted. Specifically, the FDD states that this addendum does not apply to candidates or businesses located in franchise registration states such as California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.
The purpose of this addendum is to ensure that franchisees and area developers have carefully reviewed and understood key elements of their agreement with Alloy. By signing this addendum, franchisees acknowledge their responsibilities and obligations, and confirm that they have made an independent investigation of the business opportunity.
For prospective Alloy franchisees, it's crucial to understand whether this Acknowledgment Addendum applies to their specific location. If it does not apply due to being in a franchise registration state, certain clauses within it may be unenforceable, particularly those that could be interpreted as a waiver of rights under state franchise laws. Franchisees should carefully review the entire FDD and all related documents with legal counsel to fully understand their rights and obligations, regardless of whether the Acknowledgment Addendum is applicable.