How does Floyds 99 apply royalty payments?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
12.4 Application of Payments. Notwithstanding any designation by the Franchisee, the Franchisor shall have sole discretion to apply any payments by the Franchisee, and any credits received by the Franchisor on the Franchisee's behalf from third party vendors, to any of Franchisee's past due indebtedness to Franchisor for Royalties, National Marketing Contributions, product purchases from the Franchisor or its affiliates, interest or any other indebtedness. The Franchisee acknowledges that the Franchisor has the right to set-off any amounts the Franchisee may owe to the Franchisor against any amounts the Franchisor might owe to the Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the franchisor has the authority to allocate payments from franchisees towards outstanding debts. Specifically, Floyds 99 can apply payments to cover past due royalties, national marketing contributions, product purchases from the franchisor or its affiliates, interest, or any other form of franchisee indebtedness. This is regardless of any specific designation the franchisee might attempt to make regarding the payment's intended purpose.
This discretion extends to credits received by Floyds 99 on behalf of the franchisee from third-party vendors, which can also be applied to the franchisee's outstanding debts. Furthermore, Floyds 99 retains the right to offset any amounts the franchisee owes against any amounts Floyds 99 might owe to the franchisee.
For a prospective Floyds 99 franchisee, this means that the franchisor has significant control over how payments are applied, especially when there are outstanding debts. Franchisees cannot earmark payments for specific purposes if they have existing financial obligations to Floyds 99. This policy underscores the importance of maintaining good financial standing with the franchisor to avoid having payments directed towards older debts rather than current obligations.