What is the connection between the initial fees for a Floyds 99 franchise (Item 5) and the pre-opening assistance provided by the franchisor (Item 11)?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
Qualified applicants will have the right to purchase franchise rights to develop and open multiple Barbershops by signing a Development Agreement together with the Franchise Agreement for the first FLOYD'S 99 Shop to be developed. When you sign the Development Agreement and first Franchise Agreement, you must pay us a development fee which will vary based on the number of Barbershops you commit to develop. The development fees for Barbershops under a Development Agreement are: (a) $49,500 for each of the first and second Barbershops, and (b) $34,500 for the third and each subsequent Barbershop. The development fee is fully earned by us on receipt for the grant of a geographic territory reserved for your development of Barbershops and is non-refundable.
Although we do not typically grant franchise rights to own and operate a single FLOYD'S 99 Shop, if you are granted the right to own and operate a single Barbershop a non-refundable initial franchise fee of $49,500 is payable to us in full when you sign your Franchise Agreement.
We proudly participate in the International Franchise Association's Veterans Transition Franchise Initiative, otherwise known as "VetFran." If you are a new franchisee and one of your owners is a veteran who was honorably discharged from the United States Armed Forces or is on active duty on the date you sign your Franchise Agreement, we reduce the initial franchise fee for your first new franchise if that individual owns at least 10% of the franchisee. The reduced fee will be $37,125, which is a $12,375 or 25% discount. A discount will not be given for franchises which are developed under a Development Agreement.
All of the initial fees described in this Item 5 are the same for all FLOYD'S 99 Barbershops unless otherwise specified.
7. DEVELOPMENT ASSISTANCE
- 7.1 Franchisor's Development Assistance. The Franchisor, or its designee, shall provide the Franchisee with assistance in the initial establishment of the FLOYD'S 99 Shop as follows:
- a. Provision of the initial training program to be conducted at the Franchisor's designated training facilities or at another location designated by the Franchisor, as described in Article 6 above.
- b. Provision of assistance from the Franchisor's designated site selection service provider that shall include, without limitation, one on-site visit to the market area by a representative who will assist the Franchisee with specifications for space requirements, build out and the demographics and character of the surrounding market area. The Franchisee acknowledges that the Franchisor shall have no other obligation to provide assistance in the selection and approval of a Franchised Location other than the provision of such assistance from the Franchisor's designated provider, and approval or disapproval of a proposed Franchised Location, which approval or disapproval shall be based on information submitted to the Franchisor in a form sufficient to assess the proposed location as may be reasonably required by the Franchisor.
- c. Design plans and specifications, directives regarding the required construction, conversion, design and decoration of the FLOYD'S 99 Shop premises, plus services from the Franchisor's designated suppliers, if any, regarding specifications for signs, decor, color, products, inventory, software, equipment, furnishings and layout.
- d. Information regarding the selection of suppliers of equipment, inventory, items and materials used, hair care products and merchandise offered for sale in connection with the FLOYD'S 99 Shop. The Franchisor shall make available to the Franchisee a list of designated and approved suppliers, if any, of such equipment, inventory, items, materials, products, merchandise and, if available, a description of any regional or central purchase and supply agreements offered by such designated and approved suppliers for the benefit of FLOYD'S 99 franchisees.
- e. Provision of an operations manual in accordance with Section 8.1 below.
- f. The Franchisor will assist the Franchisee in the grand opening and grand opening marketing of the FLOYD'S 99 Shop. Payment of the development fee and initial franchise fee is deferred until such time as the franchisor completes its initial obligations and franchisee is open for business. The deferral of the development fee and initial franchise fee is required by the Illinois Attorney General's Office based on our financial statements.
We reserve the right to require You to pay up to $25,000 for an opening advertising and marketing campaign for Your first Shop and each subsequent Shop that You establish.
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the initial fees paid by a franchisee are connected to the pre-opening assistance provided by the franchisor. The initial fees, which include a development fee for multi-unit development ($49,500 for each of the first and second Barbershops, and $34,500 for the third and each subsequent Barbershop) or an initial franchise fee ($49,500 for a single unit), contribute to the franchisor's ability to provide various forms of pre-opening assistance. This assistance includes site selection, design plan specifications, supplier selection, initial training programs, access to the operations manual, and grand opening assistance. For veterans, Floyds 99 offers a reduced initial franchise fee of $37,125, which is a $12,375 or 25% discount. However, this discount does not apply to franchises developed under a Development Agreement.
Specifically, the initial fees enable Floyds 99 to offer support in key areas such as helping the franchisee find a suitable location for their shop, providing the franchisee with the brand's design plans and specifications, and offering guidance on selecting suppliers for equipment and products. The fees also cover the initial training program for the franchisee and their principal manager, which is crucial for understanding Floyds 99's standards and operating procedures. Furthermore, Floyds 99 provides assistance with the grand opening and marketing of the new location, ensuring a strong start for the franchisee's business.
It is important to note that in Illinois, the payment of the development fee and initial franchise fee is deferred until Floyds 99 completes its initial obligations and the franchisee is open for business. This deferral is required by the Illinois Attorney General's Office based on Floyds 99's financial statements. Additionally, Floyds 99 reserves the right to require franchisees to pay up to $25,000 for an opening advertising and marketing campaign for each shop they establish. This highlights the ongoing investment required from franchisees to support the brand and ensure a successful launch.