Under what circumstances can Alloy modify the boundaries of a franchisee's Designated Area during the term of the Franchise Agreement?

According to Alloy's 2025 Franchise Disclosure Document, there are no circumstances under which Alloy can modify the boundaries of a franchisee's Designated Area during the term of the Franchise Agreement. The FDD states clearly that while franchisees do not receive an exclusive territory, they are granted a protected Designated Area, which is described in an exhibit to the Franchise Agreement.

This Designated Area is defined by a population of at least 30,000 people, typically covering a radius of approximately 2 miles from the Authorized Location in suburban areas. The Designated Area may be described in terms of street boundaries or drawn on a map attached to the Franchise Agreement. Alloy commits not to establish or allow another franchisee to establish another Alloy franchise within this Designated Area.

This assurance provides a level of territorial security for Alloy franchisees, ensuring that the franchisor will not encroach upon their defined market area by opening additional locations nearby. However, it is important to note that franchisees may still face competition from other franchisees due to potential overlap of Designated Area boundaries, as well as from outlets Alloy owns, or from other channels of distribution or competitive brands that Alloy controls.