Under what conditions will Alloy not establish another Facility within the Designated Area?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are in compliance with the Development Schedule, we will not develop or operate or grant anyone else a franchise to develop and operate a ALLOY facility (except for Special Sites as defined in Section 2.D or as otherwise set forth in this Agreement) in the Development Territory prior to the earlier of (i) the expiration or termination of this 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 this Agreement is determined.
Notwithstanding anything in this Agreement, upon the earliest occurrence of any of the foregoing events (a) your right to develop any additional Facility will expire and (b) we will be entitled to develop and operate, or to franchise others to develop and operate, ALLOY facilities in the Development Territory, except as may be otherwise provided under any Franchise Agreement that has been executed between us and you and that has not been terminated.
At the time you execute your final Franchise Agreement under the Development Schedule, you must have an Authorized Location for the Facility to be developed under the final Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy will not develop or operate, nor grant a franchise to anyone else to develop and operate an Alloy facility within the Development Territory if the franchisee is in compliance with the Development Schedule. This is with the exception of Special Sites as defined in Section 2.D or as otherwise set forth in the Agreement.
This protection extends until the earliest of three conditions: (i) the expiration or termination of the Agreement; (ii) the date on which the franchisee must execute the Franchise Agreement for their last Facility pursuant to the terms of the Development Schedule; or (iii) the date on which the Authorized Location for the franchisee's final Facility under the Agreement is determined. After any of these events occur, Alloy has the right to develop and operate, or franchise others to develop and operate, Alloy facilities in the Development Territory, unless otherwise provided under any Franchise Agreement that has been executed between Alloy and the franchisee and that has not been terminated.
Furthermore, at the time the franchisee executes their final Franchise Agreement under the Development Schedule, they must have an Authorized Location for the Facility to be developed under the final Franchise Agreement. This clause ensures that while the franchisee adheres to the Development Schedule, Alloy will not introduce competing facilities in the Development Territory, providing a degree of exclusivity during the development phase. However, this exclusivity is limited and contingent upon the franchisee's compliance and the specific terms outlined in the Development Schedule and Franchise Agreements.