Will Alloy unreasonably withhold approval of any agreement used in connection with a transfer?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
wner proposes to retain a security interest in the property to be transferred. No security interest may be retained or created, however, without our prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer will be subject to our prior written approval, which approval 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:
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- 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.
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- 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
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Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Alloy will not unreasonably withhold approval of any agreement used in connection with a transfer. However, any agreement used in connection with a transfer is subject to Alloy's prior written approval.
Before a transfer, a franchisee must notify Alloy of any proposed transfer and submit the application for consent to transfer, along with any other required documents and information. If a franchisee attempts to transfer without Alloy's prior written consent or does not comply with the terms of the Franchise Agreement, the attempted transfer will be void, the franchisee's interest in the agreement will be voluntarily abandoned, and Alloy can either deem the franchisee in default and terminate the agreement or collect a transfer fee equal to two times the standard transfer fee.
The standard transfer fee is $10,000, and this fee is nonrefundable, even if the proposed transfer does not occur. Alloy will only consent to a proposed transfer if certain conditions are met. The assignee must meet all of Alloy's current requirements for new franchisees and sign the current form of the franchise agreement, modified to reflect the remaining term. Additionally, all amounts owed by the franchisee to Alloy, its affiliates, suppliers, or the landlord must be paid in full, and the franchisee must have provided all required reports to Alloy. The franchisee must also have complied with modernization provisions.