In the Floyds 99 agreement, what are 'Developer Affiliates' defined as?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
rectly or indirectly arising out of Developer's operation of the FLOYD'S 99 Shop(s) developed under this Agreement. For purposes of this indemnification, claims shall mean and include all obligations, actual and consequential damages and costs reasonably incurred in the defense of any claim against the Indemnified Parties (including any claims Developer brings against the Indemnified Parties), including, without limitation, reasonable accountants', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses. Franchisor shall have the right to defend any such claim against it. This indemnity shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
10.4 Anti-Terrorism Representation. Developer and its principal shareholders, members or owners ("principals") agree to comply with or to assist Franchisor to the fullest extent possible in Franchisor's efforts to comply with Anti-Terrorism Laws (as defined below). In connection with such compliance, Developer and its principals certify, represent, and warrant that none of their respective property or interests are subject to being "blocked" under any of the Anti-Terrorism Laws and that neither Developer nor any of its principals are otherwise in violation of any of the Anti-Terrorism Laws. For the purposes of this Section, the term "Anti-Terrorism Laws" shall mean Executive Order 13224 issued by the President of the United States ("Executive Order 13224"), the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT Act, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any governmental authority (including, without limitation, the United States Department of Treasury Office of Foreign Assets Control, and any other government agency with jurisdiction over the parties to this Agreement or their actions) addressing or in any way relating to terrorist acts or acts of war.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
Based on the 2025 Floyds 99 Franchise Disclosure Document, the term "Developer Affiliates" is referenced within the context of compliance with Anti-Terrorism Laws and indemnification. Specifically, any violation of these laws by the Developer, its principals, employees, or their respective affiliates can lead to immediate termination of the agreement. Additionally, Floyds 99 requires the developer to indemnify and hold harmless Floyds 99 and its affiliates from any claims arising from the developer's activities.
For a prospective Floyds 99 franchisee, this means that not only are they responsible for their own compliance with Anti-Terrorism Laws, but they are also accountable for the actions of their principals, employees, and affiliates. This extends to potential legal and financial repercussions if any of these parties violate the specified laws. The franchisee must ensure that all related parties are aware of and adhere to these regulations to avoid jeopardizing their franchise agreement.
The indemnification clause further emphasizes the franchisee's responsibility for the actions of those associated with their business. This means that the franchisee could be held liable for legal claims, damages, and costs, including attorney's fees, arising from the operation of their Floyds 99 shop. Therefore, it is crucial for franchisees to implement robust operational procedures and ensure compliance with all applicable laws and regulations to mitigate potential risks and liabilities.
While the FDD excerpts do not provide an explicit definition of "Developer Affiliates," the context suggests it encompasses individuals or entities closely associated with the Developer, such as principals, employees, and potentially related business entities. A prospective franchisee should seek clarification from Floyds 99 regarding the precise scope of this term to fully understand their obligations and potential liabilities under the franchise agreement.