Does the Floyds 99 agreement allow the Associate to claim damages for the wrongful issuance of an injunction?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
rest as a disclosed or a beneficial owner, investor, partner, director, officer, manager, employee, consultant, representative or agent or in any other capacity in any Competitive Business located or operating within a 25 mile radius of the location of the Franchised Business, within 25 miles of any other franchised Barbershop or within 25 miles of any Company or affiliate-owned Barbershop. The restrictions of this paragraph shall not be applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on the over-thecounter market that represent 5% or less of the number of shares of that class of securities issued and outstanding. Associate and its officers, directors, shareholders, and/or partners expressly acknowledge that
they possess skills and
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the Associate (which refers to an officer, partner, director, agent, Principal Manager, employee, principal, beneficial owner, or immediate family member associated with a Floyds 99 Shop) expressly waives the right to claim damages if an injunction is wrongfully issued against them. This means that if Floyds 99 seeks and obtains an injunction against the Associate, and it is later determined that the injunction was not justified, the Associate cannot sue Floyds 99 for any financial losses they incurred as a result of the injunction.
Floyds 99 is authorized to seek preliminary and permanent injunctive relief from a court of competent jurisdiction in the event of any breach or threatened breach of the agreement by the Associate. The brand may obtain such injunctive relief, and the Associate's sole remedy is limited to seeking the dissolution of the injunction if warranted. The company is not required to post a bond of more than $500 to obtain the injunction, providing some limited protection to the Associate.
This waiver of damages is a significant point for potential associates to consider. It means they bear the financial risk associated with an injunction, even if it's later proven to be wrongfully issued. While the associate can attempt to dissolve the injunction, they cannot recover any losses suffered during the period the injunction was in place. This is a fairly standard practice in franchising, where franchisors seek to protect their brand and system, but it places a considerable burden on the franchisee or associate.
Prospective associates should carefully consider this clause and seek legal counsel to fully understand the implications of waiving their right to claim damages for a wrongfully issued injunction. They may also want to negotiate the terms of this waiver, although it is unlikely that Floyds 99 will be willing to remove it entirely. Understanding the circumstances under which Floyds 99 might seek an injunction and the potential financial consequences is crucial for making an informed decision about associating with the brand.