What aspects of the franchised location are covered in section 5 of the Floyds 99 Franchise Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
l grant of the rights to use the Marks and Licensed Methods, that the Franchisor has earned the initial franchise fee upon receipt thereof and that the fee is under no circumstances refundable to the Franchisee after it is paid, unless otherwise specifically set forth in this Agreement.
5. DEVELOPMENT OF FRANCHISED LOCATION
5.1 Approval of Franchised Location. Within two hundred seventy (270) days after the date of execution of this Agreement, the Franchisee shall locate a Franchised Location which is suitable for the operation of the FLOYD'S 99 Shop, have it approved by the Franchisor and sign the lease. If the Franchisee has made reasonable and continuing efforts to locate a Franchised Location, but site availability considerations beyond the control of the Franchisee prevent the selection of a suitable site, the Franchisor will extend the deadline to select a Franchised Location for a reasonable time if the Franchisee requests, in writing, an extension of the time to have the Franchised Location selected before such selection period lapses. The Franchisee shall follow the Franchisor's site selection procedures in locating a Franchised Location for the FLOYD'S 99 Shop, including using the Franchisor's designated site selection service provider to assist the Franchisee in finding a Franchised Location. The Franchisee shall seek the Franchisor's approval of any site proposed as a Franchised Location, by submitting a complete site submittal package, including demographics and other materials requested by the Franchisor, containing all information reasonably required by the Franchisor to assess a proposed Franchised Location. The Franchisor will not unreasonably withhold approval of a proposed site that meets all of the Franchisor's site selection criteria. The Franchisee acknowledges and agrees that the Franchisor's approval of a site and any information provided by the Franchisor regarding the site does not constitute a representation or warranty of any kind, express or implied, as to the suitability of the site for a FLOYD'S 99 Shop. If the Franchisor must disapprove of any site proposed by the Franchisee, the Franchisor will grant the Franchisee an additional, reasonable period of time to obtain approval of a Franchised Location, as may be determined in the Franchisor's reasonable business judgment.
- 5.2 Approval of Site Acquisition or Lease. The Franchisee shall obtain the Franchisor's prior written approval before executing any lease, including all lease amendments, for the Franchised Location. If the Franchisee is purchasing real property for the Franchised Location, the Franchisee shall obtain the Franchisor's prior written approval of the purchase agreement before it is signed. The lease for the Franchised Location shall contain provisions set forth in detail in the Operations Manual (defined in Section 8.1 below), which may include the following: (1) providing for an initial term, or an initial term together with any renewal terms (for which rent must be specified in the lease) of at least 10 years; (2) expressing the landlord's consent to the Franchisee's use of the Marks and all required signage for the Barbershop; (3) giving the Franchisor the right to enter the premises and make any modification necessary to protect the Marks and the Licensed Methods; (4) allowing the Franchisor, or its designee, to have the option to assume the lease and the right following such assumption to assign the lease or sublet the leased premises to another FLOYD'S 99 franchisee for all or any part of the lease term without further landlord consent if the Franchisee defaults under the lease or this Agreement or if this Agreement terminates or expires; (5) requiring the landlord to give the Franchisor written notice of any defaults by the Franchisee under such lease and the right to cure any such defaults; and (6) the lease shall also contain restrictive use clauses which are acceptable to the Franchisor. The Franchisor reserves the right to require the Franchisee to use the Franchisor's standard form of lease instead of adding the required provisions to the landlord's form of lease, in the Franchisor's sole discretion. The lease shall be conditionally assigned to the Franchisor as security for the Franchisee's timely performance of all obligations under this Agreement and the lease. The Franchisee shall enter into Franchisor's standard Conditional Assignment of Lease.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, Section 5 of the Franchise Agreement outlines the development of the franchised location. It stipulates that within 270 days of signing the agreement, the franchisee must find a suitable location, get it approved by Floyds 99, and sign the lease. If site availability is an issue, Floyds 99 may grant an extension. The franchisee is expected to follow Floyds 99's site selection procedures, including using their designated site selection service provider. Floyds 99's approval of a site does not constitute a warranty of its suitability.
Section 5 also covers the approval of site acquisition or the lease. The franchisee needs written approval from Floyds 99 before signing any lease or purchase agreement. The lease should include specific provisions detailed in the Operations Manual, such as a minimum term of 10 years (including renewals with specified rent), consent for using Floyds 99's marks and signage, the right for Floyds 99 to enter and modify the premises to protect their marks, and the option for Floyds 99 to assume and assign the lease to another franchisee under certain conditions. The lease should also require the landlord to notify Floyds 99 of any franchisee defaults and allow Floyds 99 to cure them, along with acceptable restrictive use clauses.
Furthermore, Section 5 addresses equipment, inventory, and technology. Franchisees must buy or obtain equipment, inventory, and services that meet Floyds 99's standards. The type, quality, and performance of these items are part of the Licensed Methods, requiring adherence to Floyds 99's specifications. Franchisees must maintain sufficient inventory of Floyds 99 products and other branded products to meet customer demand, as detailed in the Operations Manual. They may be required to purchase Floyds 99 products exclusively from Floyds 99, its affiliates, or designated suppliers. The barbershop must be equipped with a point-of-sale system, computer hardware, software, and telecommunications equipment that aligns with Floyds 99's standards. Franchisees must license and use the designated point-of-sale system and software, potentially with ongoing license fees, and obtain compatible computer hardware, some of which may need to be purchased from Floyds 99 or its designated suppliers.