Who are considered 'Developer Affiliates' in the context of the Floyds 99 agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, other than the FLOYD'S 99 Shop(s) authorized by separate agreement(s) with Franchisor, neither Developer nor any of Developer's officers, directors, shareholders, Principal Managers, Barbershop managers, equity owners, members, managers or partners, nor any member of his or their immediate families, shall during the term of this Agreement:
- (a) have any direct or indirect controlling interest as a disclosed or beneficial owner in a "Competitive Business" as defined below;
- (b) perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business; or
- (c) divert or attempt to divert any business related to, or any client or account of any FLOYD'S 99 Shop, Franchisor's business or any other FLOYD'S 99 Developer's business, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of Franchisor, another developer or another franchisee licensed by Franchisor to use the Marks and Licensed Methods, to any Competitive Business by any direct inducement or otherwise.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 FDD, a 'Developer's affiliates' include a wide range of individuals and entities connected to the Developer. Specifically, this extends to the Developer's officers, directors, shareholders, Principal Managers, Barbershop managers, equity owners, members, managers or partners, and any member of his or their immediate families. This broad definition is relevant in the context of restrictive covenants within the agreement, particularly concerning non-competition during the term of the agreement.
This definition is important because it restricts not only the Developer but also those affiliated with them from engaging in competitive business activities. The non-compete clause prevents these individuals and entities from having a direct or indirect controlling interest in a 'Competitive Business,' performing services for a Competitive Business, or diverting business or employees from Floyds 99. This ensures that the Developer and related parties remain fully committed to the Floyds 99 system and do not use their knowledge or resources to benefit a competing business.
The extensive scope of this definition aims to protect Floyds 99's business interests and proprietary information. By including such a wide array of affiliated parties, Floyds 99 seeks to prevent any potential conflicts of interest and maintain the integrity of its franchise system. Prospective developers should be aware of these restrictions and ensure that all related parties understand and comply with these obligations to avoid potential breaches of the development agreement.