What does the area development agreement specify for a Floyds 99 franchisee?

a "Development Fee" of $49,500 for each of the first and second FLOYD'S 99 Shops to be developed hereunder, plus $34,500 for each of the remaining Barbershops to be developed. Developer agrees that Franchisor has fully earned the Development Fee upon receipt and acknowledges that the Development Fee represents payment for the grant of the development rights, administrative and other expenses and for development opportunities lost or deferred as a result of the Development Area granted to Developer under this Agreement. All fees hereunder are nonrefundable once paid to Franchisor and under no circumstances will Developer be entitled to a refund, return or rebate of any portion of initial franchise fees or Development Fees paid hereunder.

5. DEVELOPMENT OBLIGATIONS

• 5.1 Development Schedule. Acknowledging that time is of the essence, Developer agrees to exercise its development rights according to the development schedule set forth on Exhibit I to this Agreement (the "Development Schedule") and as otherwise set forth herein. Developer must construct, open and maintain in continuous operation a minimum number of FLOYD'S 99 Shops in the Development Area within the time periods mandated by the Development Schedule. Developer's failure to adhere to the Development Schedule (including any extensions approved by Franchisor in writing) will constitute a material breach of this Agreement.
• 5.2 Effect of Failure. Strict compliance with the Development Schedule is of the essence. If Developer fails to construct and open any FLOYD'S 99 Shop or maintain the cumulative number of FLOYD'S 99 Shops open and operating in accordance with the Development Schedule, then Developer will be in default. Any such default constitutes a material breach of this Agreement and Franchisor may, in Franchisor's sole discretion, elect to:
  • (a) terminate this Agreement;
• (b) operate or grant franchises to others to operate FLOYD'S 99 Shops within the Development Area;
• (c) grant Developer, upon Developer's reasonable request, up to two (2) extensions of the Development Schedule, each for a period of six (6) months. If Franchisor agrees to provide any extensions, the first extension will be provided at no charge and the second extension, if also provided, will be subject to Developer's payment of a non-refundable $5,000 extension fee; or
• (d) reduce the Development Area and the Development Schedule to a size and magnitude that Franchisor estimates Developer is capable of operating otherwise in accordance with this Agreement.

Any extensions of the time periods to open the Barbershops are subject to Franchisor's extension policy, which may change from time to time and may require Developer to pay additional fees to Franchisor.

5.3 Site Selection. Developer shall not, without the prior written approval of Franchisor, enter into any contract for the purchase or lease of any premises for use as a FLOYD'S 99 Shop. Franchisor will assist Developer in the selection and approval of locations for its Barbershops, although Developer acknowledges that Franchisor has no obligation to select or acquire a location on behalf of Developer. Assistance by Franchisor will consist of the provision of criteria for a satisfactory location and any other assistance set forth in the Franchise Agreement.

6. TRAINING

6.1 Training Program. Developer acknowledges that Franchisor retains the right, in its sole discretion, to waive the initial training program, which is similar to the training outlined in Section 6.1 of the concurrently executed Franchise Agreement, for subsequent Barbershops developed under this Agreement. Developer may also seek additional assistance from Franchisor concerning site selection, site feasibility studies, lease negotiations, and other development-related matters within its designated Development Area. For purposes of clarification, the "additional assistance" described in this Section is assistance that Developer requests which is not otherwise part of the initial training program. Should Franchisor opt to provide such additional assistance, Developer acknowledges that Franchisor may incur expenses such as travel, lodging, living expenses, telephone charges and other identifiable costs. Franchisor reserves the right to charge Developer for incurred expenses, along with a fee based on hourly time spent by Franchisor's employees in providing such additional assistance. This fee will be assessed in accordance with the prevailing daily or hourly rates set by Franchisor for assistance.

7. MARKS

7.1 Marks. Notwithstanding any provision to the contrary under this Agreement, this Agreement does not grant Developer any right to use the Marks. The right to use the Marks may only be granted by the terms of a Franchise Agreement. Developer acknowledges and agrees that, until a Franchise Agreement has been entered into for a specific Barbershop, Developer will not have, nor be entitled to receive, any of the rights, powers and privileges granted by the Franchise Agreement, including, without limitation, the right to use the Marks. Developer may not use any Mark as part of any corporate or trade name or as Developer's primary business name or with any prefix, suffix or other modifying words, terms, designs or symbols, or in any modified forms. Developer may not use any Mark in connection with any business or activity other than the business conducted by Developer pursuant to the Franchise Agreements nor in any other manner not explicitly authorized in writing by Franchisor.

8. TRANSFER

8.1 Transfer by Developer. The rights and duties created by this Agreement are personal to Developer and, except as stated below, Franchisor shall not allow or permit any transfer, assignment, or conveyance of this Agreement or any interest hereunder.

Source: Item 23 — RECEIPT (FDD pages 58–229)