Under what conditions can Alloy terminate the Franchise Agreement or Area Development Agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to either execute a Franchise Agreement or to open an Facility according to the dates set forth in this Agreement or otherwise fail to comply with the Development Schedule, we have the right to immediately terminate this Agreement pursuant to Section 7.B.
Unless sooner terminated in accordance with Section 7 of this Agreement and subject to the terms detailed in Section 2.C, the term of this Agreement and all rights granted to you will expire on the date that your last ALLOY Facility is scheduled to be opened under the Development Schedule.
Upon termination or expiration of this Agreement, all rights granted to you will automatically terminate, and:
- A. All remaining rights granted to you to develop Facilities under this Agreement will automatically be revoked and will be null and void. You will not be entitled to any refund of any fees. You will have no right to develop or operate any business for which a Franchise Agreement has not been executed by us. 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.
- B. You must immediately cease to operate your business under this Agreement and must not thereafter, directly or indirectly, represent to the public or hold yourself out as a present or former developer of ours except in connection with the business operations of any existing, Facilities that have been developed prior to the termination of this Agreement and that are still operating under a valid Franchise Agreement.
- C. Except as specifically permitted under any then-effective Franchise Agreement, you must take such action as may be necessary to cancel or assign to us or our designee, at our option, any assumed name or equivalent registration that contains the name or any of the words ALLOY or any other Trademark of ours, and you must furnish us with evidence satisfactory to us of compliance with this obligation within 30 days after termination or expiration of this Agreement.
California Business and Professions Code Sections 20000 through 20043, the California Franchise Relations Act, provide rights to the franchisee concerning termination, transfer or non-renewal of a franchise. If the area development agreement contains a provision that is inconsistent with the law, the law will control.
Minnesota law provides franchisees with certain termination and nonrenewal rights. As of the date of this Area Development Agreement, Minn. Stat. Sec. 80C.14, Subd. 3, 4 and 5 require, except in certain specified cases, that a franchisee be given 90 days notice of termination (with 60 days to cure) and 180 days notice for nonrenewal of the Area Development Agreement.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 51–56)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy has the right to immediately terminate the Area Development Agreement if the franchisee fails to either execute a Franchise Agreement or to open a Facility according to the dates set forth in the agreement, or otherwise fails to comply with the Development Schedule. The term of the Area Development Agreement, including all rights granted to the franchisee, will expire on the date that the last Alloy Facility is scheduled to be opened under the Development Schedule, unless sooner terminated according to the terms detailed in the agreement. Upon termination or expiration of the Area Development Agreement, all rights granted to the franchisee will automatically terminate, and the franchisee will not be entitled to any refund of any fees. Alloy is then 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 Alloy and the franchisee and that has not been terminated.
In the state of California, the California Franchise Relations Act provides rights to the franchisee concerning termination, transfer, or non-renewal of a franchise. If the Area Development Agreement contains a provision that is inconsistent with the law, the law will control. In Minnesota, a franchisee must be given 90 days notice of termination (with 60 days to cure) and 180 days notice for nonrenewal of the Area Development Agreement, except in certain specified cases.
Upon termination or expiration of the Area Development Agreement, the franchisee must immediately cease to operate their business under the Area Development Agreement and must not thereafter, directly or indirectly, represent to the public or hold themselves out as a present or former developer of Alloy, except in connection with the business operations of any existing Facilities that have been developed prior to the termination of the Area Development Agreement and that are still operating under a valid Franchise Agreement. The franchisee must take action to cancel or assign to Alloy any assumed name registration that contains the name Alloy, and assign to Alloy all rights to telephone numbers associated with the Trademarks.