Which article of the Floyds 99 Franchise Agreement outlines the franchisee's territorial rights?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
any services or products not previously approved by the Franchisor in writing and shall further be restricted from offering the authorized services or distributing the authorized products for nonretail or off-site sale except as permitted by the Franchisor in writing.
3. FRANCHISED LOCATION AND TERRITORIAL RIGHTS
3.1 Franchised Location. The Franchisee is granted the right and franchise to own and operate a FLOYD'S 99 Shop at the address and location which shall be set forth in Exhibit I, attached hereto ("Franchised Location"). If, at the time the parties execute this Agreement, the Franchised Location cannot be designated as a specific address because a location has not been selected and approved, then the Franchisee shall promptly take steps to choose and acquire a location for its FLOYD'S 99 Shop within the
- "Designated Area," set forth in Exhibit I. In such circumstances, the Franchisee shall select and propose to the Franchisor for the Franchisor's prior approval a specific location for the Franchised Location which, once approved by the Franchisor, shall then be described in the rider to Exhibit I.
- 3.2 Protected Territory. Subject to the Franchisor's reservation of rights described in Section 3.4 below, the Franchisor shall not establish and operate, or franchise another person or entity to establish and operate, a FLOYD'S 99 Shop within the geographic area described in Exhibit I, attached hereto (the "Protected Territory"). Once Franchisor has defined the Protected Territory, Franchisee will have no further territorial or other rights in those portions of the Designated Area that are located outside of the Protected Territory.
- 3.3 Limitation on Franchise Rights; Relocation. The rights that are granted to the Franchisee are for the specific Franchised Location and cannot be transferred to an alternative Franchised Location, or any other location, without the prior written approval of the Franchisor, which approval shall not be unreasonably withheld. The Franchisee shall not operate another business, offer services or products which are part of the Licensed Methods at any site other than the Franchised Location (except for other Franchised Locations covered by other Franchise Agreements with the Franchisee), fill wholesale orders, sell products or services by mail order or through catalogs or the Internet, transship or reship products, or offer any other type of off-site service or sale of products. If Franchisee desires to relocate the FLOYD'S 99 Shop or is unable to continue the operation of the FLOYD'S 99 Shop at the Franchised Location because of damage to or destruction of the FLOYD'S 99 Shop, then Franchisee may request Franchisor's approval to relocate the FLOYD'S 99 Shop to another location in the Protected Territory, which approval shall not be unreasonably withheld. If Franchisor grants Franchisee the right to relocate the FLOYD'S 99 Shop, then Franchisee shall comply with the site selection and construction procedures set forth in Article 5 and pay Franchisor the then-current relocation fee.
- 3.4 Franchisor's Reservation of Rights.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, Article 3 of the Franchise Agreement, titled "Franchised Location and Territorial Rights," outlines the franchisee's territorial rights. Section 3.2 specifically addresses the Protected Territory, stating that Floyds 99 will not operate or franchise another entity to operate a shop within the geographic area described in Exhibit I of the agreement. Once the Protected Territory is defined, the franchisee has no further territorial rights outside of it.
Exhibit I to the Franchise Agreement further details the specifics of the Franchised Location, Designated Area, and Protected Territory. If the Franchised Location is not yet determined when the agreement is signed, the franchisee must choose and acquire a location within the Designated Area set forth in Exhibit I. The Protected Territory is also described in Exhibit I, providing a clear geographic boundary within which the franchisee receives some territorial protection.
However, Section 3.4 outlines Floyds 99's reservation of rights, clarifying that the franchise rights granted are non-exclusive. Floyds 99 retains the right to use and license others to use the Marks and Licensed Methods outside the Protected Territory. They also reserve the right to use the Marks for various services, products, and distribution channels, even within the Protected Territory, such as through internet marketing, wholesale distribution, or at temporary events. Floyds 99 also retains the right to operate Barbershops within "Captive Audience Facilities" like airports, hospitals, and college campuses, even if these are located within a franchisee's Protected Territory, although they will notify the franchisee of such opportunities.