Does Alloy have sole discretion to reject a proposed location for a Franchised Business?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
- Consult with you on the location for your Franchised Business, which must be accepted by us. Your site must meet our criteria for population and/or median income in the surrounding area, size and cost of the facility that you select and other similar factors, including
our business judgment. We may reject your proposed location in our sole discretion. Our acceptance only means that the site meets our minimum requirements for a Franchised Business (Franchise Agreement – Section 5.A).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–42)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy retains the sole discretion to reject a proposed location for a franchised business. The FDD states that Alloy consults with franchisees on the location of their franchised business, but the site must be accepted by them. Alloy's criteria include population and/or median income in the surrounding area, size and cost of the facility, and other similar factors, including their business judgment.
This means that even if a franchisee finds a location that meets Alloy's minimum requirements, Alloy can still reject the site based on their own business judgment. This gives Alloy significant control over site selection and ensures that all franchised locations align with their overall brand strategy and market positioning.
For a prospective franchisee, this highlights the importance of working closely with Alloy during the site selection process and understanding their criteria for an acceptable location. While franchisees can propose locations, the final decision rests with Alloy. Franchisees should consider this when evaluating the franchise opportunity and be prepared to potentially search for multiple locations before securing approval. This is a fairly common practice in franchising, as franchisors want to ensure brand consistency and a higher likelihood of success by controlling location choices.