Is the continuation of a franchisee's right to their Development Area dependent on meeting the development schedule in the Floyds 99 Development Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for our reservation of rights described below, we may not establish or franchise any other person or entity to establish FLOYD'S 99 Shops using the Marks and Licensed Methods within your Protected Territory or, if applicable, your Development Area for so long as the Franchise Agreement or, if applicable, Development Agreement, is in effect. The continuation of your right to your Development Area during the term of the Development Agreement is dependent on meeting the development schedule set forth in the Development Agreement. If you do not meet your development schedule, we may: (a) terminate your Development Agreement, (b) operate or grant franchises to others to operate FLOYD'S 99 Shops within the Development Area, or (c) reduce the Development Area and the development schedule to a size and magnitude that we in our discretion estimate you are capable of operating.
Source: Item 12 — TERRITORY (FDD pages 38–41)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, a franchisee's right to their Development Area is contingent upon adhering to the development schedule outlined in the Development Agreement. This means that franchisees must meet the milestones and timelines specified for opening new Floyds 99 shops within their designated area. Failing to meet these requirements can have significant repercussions.
If a Floyds 99 franchisee fails to meet the development schedule, the franchisor has several options. They may terminate the Development Agreement entirely, effectively ending the franchisee's rights to develop within the area. Alternatively, Floyds 99 could choose to operate or grant franchises to other parties to operate Floyds 99 shops within the Development Area, taking away the original franchisee's opportunity. A third option is for Floyds 99 to reduce the size of the Development Area and adjust the development schedule to a level that they believe the franchisee can realistically manage.
These stipulations highlight the importance of careful planning and execution for franchisees entering into a Development Agreement with Floyds 99. Franchisees should carefully assess their capabilities and resources to ensure they can meet the agreed-upon development schedule. The potential consequences of failing to do so, including termination of the agreement or loss of territory, underscore the need for a realistic and achievable development plan.
Prospective Floyds 99 franchisees should discuss the development schedule and potential adjustments with the franchisor during their due diligence. Understanding the factors that could impact the schedule and the flexibility available in the agreement is crucial for mitigating risks and ensuring a successful partnership.