Under what circumstances is a transfer of an Alloy franchise considered to have occurred?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
val will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfer fee provided for in subparagraph 11.C.
- C. Transfer Fee. You must pay to us a transfer fee in the amount of $10,000. The transfer fee is nonrefundable even if, for any reason, the proposed transfer does not occur.
- D. Conditions of Transfer. We condition our consent to any proposed transfer, whether to an individual, a corporation, a partnership or any other entity upon the following:
-
- Assignee Requirements. The assignee must meet all of our then-current requirements for our ALLOY franchise program we are offering at the time of the proposed transfer and sign our then-current form of franchise agreement modified to reflect the term remaining under this Agreement.
-
- Payment of Amounts Owed. All amounts owed by you to us, or any of our affiliates, your suppliers or any landlord for the Facility premises and Facility, or upon which we or any of our affiliates have any contingent liabili
-
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, any attempt to transfer a franchise without prior written consent from Alloy, or if the transfer does not comply with the terms of the Franchise Agreement, is considered void. In such cases, the franchisee's interest in the agreement is considered voluntarily abandoned. This gives Alloy the right to either deem the franchisee in default and terminate the agreement or to collect a transfer fee equal to two times the standard transfer fee.
Specifically, the standard transfer fee is $10,000, so an unapproved transfer would incur a fee of $20,000. This fee is nonrefundable, regardless of whether the proposed transfer ultimately occurs.
Alloy also conditions its consent to any proposed transfer on several factors. The assignee must meet all of Alloy's current requirements for new franchisees and must sign the then-current form of the franchise agreement, modified to reflect the remaining term of the original agreement. Additionally, all outstanding amounts owed by the franchisee to Alloy, its affiliates, suppliers, or the landlord must be paid in full. The franchisee must also have provided all required reports to Alloy and complied with modernization requirements.