What is the consequence if a Floyds 99 developer fails to adhere to the development schedule?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
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 D
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, failing to adhere to the development schedule constitutes a material breach of the Development Agreement. Floyds 99 emphasizes that strict compliance with the development schedule is essential. If a developer fails to construct and open the required number of Floyds 99 shops or maintain the cumulative number of shops as per the schedule, they will be in default.
In the event of such a default, Floyds 99 has the discretion to take several actions. They may terminate the Development Agreement, allowing them to end the relationship with the developer. Alternatively, Floyds 99 can choose to operate or grant franchises to others within the developer's designated area.
Floyds 99 may also grant the developer up to two extensions of the development schedule, each lasting six months. The first extension is provided at no charge, but the second extension requires the developer to pay a non-refundable $5,000 extension fee. Another option available to Floyds 99 is to reduce the development area and the development schedule to a size that they believe the developer can manage while still adhering to the agreement. These extensions are subject to Floyds 99's extension policy, which may change and could involve additional fees.
Prospective developers should carefully review the development schedule outlined in Exhibit I of the Development Agreement and consider their ability to meet these obligations. Failure to do so can result in significant consequences, including termination of the agreement and loss of development rights.