According to Floyds 99, what is considered a 'Competitive Business'?

According to the 2025 Floyds 99 Franchise Disclosure Document, a 'Competitive Business' is defined as any business that operates or grants franchises or licenses to others to operate either a retail hair care business deriving more than 5% of its gross sales from haircuts or hair care products, or a wholesale business deriving more than 5% of its gross sales from the sale of hair care products. This definition is relevant to the non-compete clauses within the franchise agreement, both during the term of the agreement and after termination.

During the term of the agreement, franchisees are restricted from having a direct or indirect controlling interest in a Competitive Business. They are also prohibited from performing services for a Competitive Business or diverting business or employees from any Floyds 99 shop. After the agreement terminates, the franchisee is restricted from being involved with a Competitive Business within a 25-mile radius of their former Floyds 99 location, any other franchised Floyds 99 shop, or any Floyds 99 shop owned by the franchisor or its affiliates for a period of two years.

However, there is an exception: franchisees are allowed to own securities in a Competitive Business if the securities are listed on a stock exchange or traded over-the-counter, and represent 5% or less of the outstanding securities. This exception allows franchisees to make minor investments in publicly traded companies that might be considered competitive without violating the non-compete agreement. This definition is crucial for prospective franchisees to understand, as it outlines the scope of activities they are restricted from engaging in, both during and after their franchise agreement with Floyds 99.