Upon termination or expiration of the Alloy franchise agreement, what happens to the franchisee's rights to use the trademarks?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
t to develop hereunder, terminate or reduce the Development Territory, repurchase any Facilities open by you under this Agreement or exercise any other rights and remedies that we may have under the law.
RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION
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- 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.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, the franchisee's rights to use Alloy's trademarks are immediately terminated. The franchisee must cease operating the business and cannot represent themselves as a current or former Alloy developer, except concerning existing facilities operating under a valid franchise agreement.
Specifically, the franchisee is required to cancel or assign to Alloy any assumed name registrations that include "Alloy" or any of Alloy's trademarks, providing evidence of compliance within 30 days of termination or expiration. Additionally, the franchisee must assign their rights to telephone numbers associated with the trademarks to Alloy and notify the telephone company and listing agencies to authorize the transfer.
These stipulations are typical in franchising to protect the brand's integrity and prevent confusion after a franchise agreement ends. Alloy aims to ensure that former franchisees do not continue to benefit from the brand's reputation without authorization, maintaining consistent brand representation across all its locations.