When is the transfer fee payable to Alloy?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee (1) | Amount | Date Due | Remarks |
|---|---|---|---|
| travel, lodging, meals, and wages | |||
| Insufficient Funds/Late Report Fee | $100 fee for late report/late payment, with fee increasing by $50 for each subsequent late report/late payment (up to a maximum of $250 for the fourth and any subsequent late report/late payment | On demand, if incurred | You must pay us this fee if there are not sufficient funds in your bank account to process payments owed to us and/or our affiliates or you are late in submitting reports. If you incur this fee three times in any 12 month period, we may terminate your Franchise Agreement without giving you the right to cure the default |
| Interest on Overdue Amounts | 12% per annum or the highest legal contract rate, whichever is less | Upon billing | Payable on all overdue amounts. Interest accrues from the original due date until payment is received in full |
| Audit | Cost of the audit (estimated to be between $1,000 and $5,000) | On demand | Payable only if the audit is conducted due to your failure to provide reports when required or if the audit shows you have understated any amount due to us (or Gross Sales) by 3% or more. You must also pay any understated amount plus interest |
| Transfer Fee | $10,000 | Application fee is payable with request for approval of transfer. Transfer fee is payable when transfer is approved | No fee is imposed for a one time transfer to a corporate entity formed by you for the convenience of ownership or an instance where you have a Business and are adding an operating partner who will have a 20% or less ownership interest and we determine there is no c |
Source: Item 6 — OTHER FEES (FDD pages 15–20)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the $10,000 transfer fee is payable in two stages. First, an application fee is due when the franchisee requests approval for the transfer. The remaining transfer fee is then payable when Alloy approves the transfer.
However, Alloy does not impose a transfer fee in two specific instances. The first is a one-time transfer to a corporate entity that the franchisee forms for ownership convenience. The second is when the franchisee adds an operating partner with a 20% or less ownership stake, provided Alloy determines there is no change of control in the franchisee entity.
It is important for prospective Alloy franchisees to understand these conditions regarding transfer fees, as transferring a franchise can be a significant event. Knowing when the fee is due and the circumstances under which it may be waived can help in financial planning and decision-making related to the potential sale or restructuring of the franchise.