What does the Alloy surety bond in Maryland cover regarding franchise fees?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Due to the financial condition of the Franchisor, the Maryland Securities Commissioner has required a financial assurance. Therefore, we have posted a surety bond which is on file with the Maryland Securities Division. A copy of the surety bond is attached as an exhibit to the Maryland addenda pages. The surety bond covers the initial franchise fee for a single unit franchise or an area development franchise for three units, which at this time is all we are offering and selling in the State of Maryland. We will not offer and sell any other area development franchises in the State of Maryland.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the Maryland Securities Commissioner requires a financial assurance due to Alloy's financial condition. To meet this requirement, Alloy has posted a surety bond on file with the Maryland Securities Division.
This surety bond specifically covers the initial franchise fee for a single-unit Alloy franchise or an area development franchise for three units. The FDD states that Alloy is only offering and selling these types of franchises in Maryland at this time. Alloy also states that it will not offer and sell any other area development franchises in the State of Maryland.
For a prospective franchisee in Maryland, this means that the initial franchise fee is protected by the surety bond. If Alloy fails to meet its obligations, a franchisee may be able to make a claim against the bond to recover the initial franchise fee paid. It is important to note that the surety bond only covers single-unit franchises and area development franchises for three units, as these are the only types Alloy is currently offering in Maryland.