Under what circumstance will Alloy have the option to purchase the assets of a Facility from the developer after termination?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
- F. If this Agreement is terminated, you may continue to operate, pursuant to the terms of the applicable Franchise Agreement(s), any Facility(s) open and operating at the time of the termination of this Agreement, unless the termination of this Agreement constitutes a termination under the terms of the separate Franchise Agreement for the Facility. Under such circumstances, we will have the option to purchase from you all assets used in the Facility(s) that have been developed prior to the termination of this Agreement and that are subject to closure under the terminating Franchise Agreement(s), as provided in the post-termination purchase option provision of the terminating Franchise Agreement(s).
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy has the option to purchase the assets of a franchisee's facility under specific conditions related to termination. If the Development Agreement is terminated, but the Franchise Agreement for a specific Alloy facility remains in effect, the franchisee can continue to operate that facility under the terms of the Franchise Agreement.
However, if the termination of the Development Agreement also leads to the termination of a specific Franchise Agreement, Alloy has the option to purchase all assets used in the facility that is subject to closure. This purchase option is governed by the post-termination purchase option provision outlined in the terminating Franchise Agreement.
In practical terms, this means that if a franchisee's Alloy location is forced to close due to the termination of its Franchise Agreement (potentially linked to the termination of the broader Development Agreement), Alloy can step in and buy the assets of that specific location. This provision ensures that Alloy can maintain control over its brand and facilities, even in cases of franchisee default or termination.