Under what condition related to Washington State Securities Division approval would Alloy's receipts be affected?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Liability for the payment of this sum, to which we hereby obligate and bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, becomes effective upon the following conditions:
- Approval by the Administrator of the Washington State Securities Division of the Principal's application to offer or sell franchises in this state; and
- Failure by the Principal to strictly comply with all applicable provisions of, and all orders, rules, and regulations issued pursuant to, the Washington State Franchise Investment Protection Act, chapter 19:100 RCW.
This Bond shall expire at such time as the Principal's registration is withdrawn, terminates through non-renewal, or is revoked by the Securities Division except as to liabilities of the Principal arising prior to such time. This Bond may also be cancelled by the Surety upon 30 days written notice by registered mail to the Principal and to the Securities Division. At the end of the 30 day period, the Bond shall be deemed cancelled except as to liabilities of the Principal arising prior to the date of cancellation. The notice of cancellation shall be deemed effective and the 30 day period shall begin to run upon
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, a surety bond's liability becomes effective upon the Washington State Securities Division approving Alloy's application to offer or sell franchises in Washington. Additionally, liability is triggered if Alloy fails to comply with the Washington State Franchise Investment Protection Act.
This means that Alloy is obligated to comply with Washington's franchise laws and regulations to maintain its ability to offer franchises in the state. The surety bond ensures that if Alloy violates these regulations, funds are available to compensate franchisees who may be harmed as a result.
The bond remains in effect until Alloy's registration is withdrawn, terminated due to non-renewal, or revoked by the Securities Division, except for liabilities arising before such actions. The surety can cancel the bond with 30 days' notice to Alloy and the Securities Division, but cancellation does not affect liabilities incurred before the cancellation date. This arrangement protects potential Alloy franchisees in Washington by providing a financial guarantee against potential misconduct or non-compliance by the franchisor.