What constitutes a 'Competitive Business' that a Floyds 99 developer is restricted from being involved with?

According to the 2025 Floyds 99 Franchise Disclosure Document, a "Competitive Business" is defined as any business that operates or grants franchises or licenses to others to operate either a retail hair care business deriving more than 5% of its gross sales from haircuts or hair care products, or a wholesale business deriving more than 5% of its gross sales from the sale of hair care products. This definition is relevant during the term of the Development Agreement.

However, the Floyds 99 developer is not prohibited from owning securities in a Competitive Business if such securities are listed on a stock exchange or traded on the over-the-counter market, provided that the securities represent 5% or less of that class of securities issued and outstanding. This exception allows for minor, passive investments in publicly traded competitor companies.

This restriction is also in place for two years after the termination or expiration of the Development Agreement. During this post-term period, the developer and its officers, directors, shareholders, Principal Managers, members, managers, and/or partners are prohibited from having any direct or indirect interest in any Competitive Business operating within a 25-mile radius of the franchised location, any other franchised Floyds 99 shop, or any Floyds 99 shop owned by the franchisor or its affiliates. This post-termination covenant also includes the same exception for ownership of publicly traded securities representing 5% or less of the outstanding shares.