What constitutes a material breach of the Floyds 99 development agreement?
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. The Development Schedule, outlined in Exhibit I of the agreement, mandates the developer to construct, open, and maintain a minimum number of Floyds 99 shops within specific time periods in the Development Area.
Strict compliance with the Development Schedule is critical. If a developer fails to open the required number of Floyds 99 shops, they will be in default, which constitutes a material breach. In the event of such a breach, Floyds 99 has the discretion to take several actions, including terminating the agreement, operating or franchising others to operate shops within the Development Area, granting up to two extensions of six months each (with a $5,000 fee for the second extension), or reducing the Development Area and Schedule to a manageable size.
Prospective developers should carefully review the Development Schedule (Exhibit I) and extension policies to fully understand their obligations and the potential consequences of non-compliance. The franchisor's extension policy may change and could require additional fees. Understanding these terms is crucial for avoiding default and maintaining a positive relationship with Floyds 99.