Under what circumstances may Alloy terminate a Franchise Agreement without giving the franchisee an opportunity to cure the default?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to achieve the minimum annual Gross Sales a first time, you must receive additional on-site training and assistance from one of our representatives, at your expense (including payment of our then-current per diem fee plus reimbursement of our representative's expenses). If you fail to achieve the minimum annual Gross Sales a second time, we may again require you to receive additional on-site training and assistance. If you fail to achieve the minimum annual Gross Sales a third time, we may terminate your Franchise Agreement without giving you the opportunity to cure the default. You must pay any shortfall of royalty fees for each failure to achieve the minimum annual Gross Sales.
Source: Item 12 — TERRITORY (FDD pages 42–46)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy may terminate the Franchise Agreement without providing an opportunity to cure the default if a franchisee fails to achieve the minimum annual Gross Sales for a third time.
Specifically, if a franchisee fails to meet the minimum annual Gross Sales for the first time, they are required to undergo additional on-site training and assistance from an Alloy representative at their own expense, including per diem fees and expense reimbursement for the representative. A second failure to achieve the minimum annual Gross Sales may result in Alloy requiring additional on-site training and assistance again.
However, if the franchisee fails to achieve the minimum annual Gross Sales for a third time, Alloy has the right to terminate the Franchise Agreement immediately, without offering the franchisee an opportunity to correct the deficiency. The franchisee is also responsible for paying any shortfall of royalty fees for each failure to achieve the minimum annual Gross Sales. This policy highlights the importance of meeting sales targets and the potential consequences of repeated underperformance for Alloy franchisees.