After termination of the Alloy Development Agreement, can Alloy develop Alloy Facilities in the Development Territory?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Upon termination or expiration of this Agreement, all rights granted to you will automatically terminate, and:
- A. All remaining rights granted to you to develop Facilities under this Agreement will automatically be revoked and will be null and void. You will not be entitled to any refund of any fees. You will have no right to develop or operate any business for which a Franchise Agreement has not been executed by us. We will be entitled to develop and operate, or to franchise others to develop and operate, ALLOY Facilities in the Development Territory, except as may be otherwise provided under any Franchise Agreement that has been executed between us and you and that has not been terminated.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, upon termination or expiration of the Development Agreement, Alloy has the right to develop and operate Alloy Facilities, or to franchise others to do so, within the Development Territory. This is with the exception of any Franchise Agreement that has already been executed between the franchisee and Alloy and has not been terminated.
This means that if the Development Agreement is terminated, Alloy is free to establish its own locations or grant franchises to others in the territory that was previously exclusive to the developer, except for locations already under a valid Franchise Agreement with the developer. The franchisee loses all rights to further develop the territory, and Alloy regains control over its brand's expansion in that area.
This clause protects Alloy's interests by ensuring that territories do not remain undeveloped if a developer fails to meet their obligations or the agreement is otherwise terminated. It also allows Alloy to continue growing its brand and market presence, even if a development agreement does not work out as planned. A prospective franchisee should carefully consider the implications of termination on their development rights and the potential for Alloy to compete directly or through other franchisees in the same territory.