Under what circumstances can Alloy operate a competing facility within my Alloy Development Territory?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
or affiliate owned facilities at
any time or at any location outside of the Development Territory. You may not use the words ALLOY or any of the other Trademarks as part of the name of your corporation, partnership, limited liability company or other similar entity.
You acknowledge and agree that we and our affiliates have the right to operate and franchise others the right to operate facilities or any other business within and outside the Development Territory under trademarks other than the ALLOY Trademarks, without compensation to any franchisee, except that our operation of, or association or affiliation with, facilities (through franchising or otherwise) in the Development Territory that compete with ALLOY facilities will only occur through some form of merger or acquisition with an existing facility or retail chain business. Outside of the Development Territory, we and our affiliates have the right to grant other franchises or develop and operate company or affiliate owned ALLOY facilities and offer, sell or distribute any products or services associated with the System (now or in the future) and under the Trademarks or any other trademarks, service marks or trade names or through any distribution channel or method, all without compensation to any franchisee.
We and our affiliates have the right to offer, sell or distribute, within and outside the Development Territory, any services or products associated with the System (now or in the future) or identified by the Trademarks, or any other trademarks, service marks or trade names, through any distribution channels or methods, without compensation to any franchisee. The distribution channels or methods ("Alternative Methods of Distribution") include, without limitation, the internet (or any other existing or future form of electronic commerce).
You acknowledge and agree that certain locations within the Development Territory are by their nature unique and separate in character from sites generally developed as facilities. As a result, you agree that the following captive market locations ("Special Sites") are excluded from the Development Territory and we have the right to develop or franchise such locations: (1) military bases; (2) public transportation facilities (including airports); (3) business or industry locations (e.g. manufacturing site, office building), or sports facilities; (4) student unions or other similar buildings on college or university campuses; (5) malls or enclosed shopping centers; and (6) community and special events.
E.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy has some specific rights to operate or franchise others to operate facilities that might compete with your Alloy facility within your Development Territory. Alloy will not develop or operate or grant anyone else a franchise to develop and operate an Alloy facility in your Development Territory if you are in compliance with the Development Schedule. This is only true until the earliest of (i) the expiration or termination of your Development Agreement; (ii) the date on which you must execute the Franchise Agreement for your last Facility pursuant to the terms of the Development Schedule or (iii) the date on which the Authorized Location for your final Facility under your Development Agreement is determined.
However, there are exceptions. Alloy can develop or franchise "Special Sites" within your territory. These Special Sites include: (1) military bases; (2) public transportation facilities (including airports); (3) business or industry locations (e.g. manufacturing site, office building), or sports facilities; (4) student unions or other similar buildings on college or university campuses; (5) malls or enclosed shopping centers; and (6) community and special events.
Additionally, Alloy and its affiliates retain the right to engage in Merger/Acquisition Activity with any businesses or facilities, even those in competition with Alloy, under other systems and/or marks. These acquired businesses can then convert to or operate under the Alloy Trademarks and offer similar services or products as your Alloy facility, regardless of location. This means that Alloy could acquire a competing fitness business within your Development Territory and rebrand it as an Alloy location, effectively creating a competing facility. This could impact your potential customer base and revenue. It is important to note that Alloy also retains all rights not expressly granted to you in the Development Agreement, allowing them flexibility in their business operations and expansion strategies.