After termination of the Alloy Development Agreement, what happens to Alloy's rights to 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, all rights granted to the franchisee automatically terminate. Specifically, all remaining rights to develop Alloy facilities under the agreement are revoked and become null and void. The franchisee is not entitled to any refund of fees and has no right to develop or operate any business for which a Franchise Agreement has not been executed.
Following termination, Alloy retains the right to develop and operate, or to franchise others to develop and operate, Alloy Facilities in the Development Territory. This is with the exception of any rights that may be provided under a Franchise Agreement that has already been executed between Alloy and the franchisee and that remains active.
This means that a prospective Alloy franchisee entering into a Development Agreement should be aware that their rights to develop within the territory are contingent upon maintaining the agreement. If the agreement is terminated, Alloy can then develop or franchise others to develop in that same territory, potentially creating competition for any existing Alloy facilities the franchisee may already own and operate under separate Franchise Agreements.