What standard is used to determine the price of the Alloy Facility assets by the appraiser?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The price determined by the appraiser(s) will be the reasonable fair market value of the assets based on their continuing use in, as, and for the operation of a ALLOY Facility and the appraiser will designate a price for each category of asset (e.g., land, building, equipment, fixtures, etc.), but shall not include the value of any goodwill of the business, as the goodwill of the business is attributable to the Trademarks and the System.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if Alloy exercises its right to purchase the assets of a franchisee's facility, the price will be determined by a qualified appraiser. The appraiser will determine the reasonable fair market value of the assets based on their continuing use in the operation of an Alloy facility.
The assets to be appraised include the premises, building, equipment, fixtures, signage, furnishings, supplies, leasehold improvements, and inventory. The appraiser will designate a price for each category of asset, such as land, building, equipment, and fixtures.
However, the appraisal will not include the value of any goodwill of the business. This is because Alloy considers the goodwill of the business to be attributable to its trademarks and the Alloy system itself, not to the individual franchisee's efforts. This is a fairly standard practice in franchising, as the brand's reputation is a key component of the franchise system's value.