Under what circumstances would Alloy determine that a franchisee is in default of the Franchise Agreement?

According to Alloy's 2025 Franchise Disclosure Document, a franchisee can be considered in default of the Franchise Agreement if they are not in good standing. To maintain good standing, the franchisee must not be in default of the Development Agreement, any Franchise Agreement entered into pursuant to the Development Agreement, or any other agreement between the franchisee (or their affiliates) and Alloy (or its affiliates).

Furthermore, the franchisee must satisfy all monetary and other material obligations under the Franchise Agreements for all existing Alloy facilities on a timely basis. This means that any failure to meet financial obligations or other significant duties outlined in the franchise agreements for any of the franchisee's Alloy locations could trigger a default.

In practical terms, this section emphasizes the importance of fulfilling all contractual obligations to Alloy. A prospective franchisee should carefully review all agreements to understand their responsibilities and ensure they have the resources to meet those obligations. Failure to do so could result in Alloy declaring the franchisee in default, which could lead to termination of the franchise agreement and loss of the business.