How does Floyds 99 define 'Compliance' with the Franchise Agreement for renewal purposes?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.3 Rights Upon Expiration. At the end of the initial term hereof, the Franchisee shall have the option to renew its franchise rights for an additional term, by acquiring successor franchise rights, if the Franchisor does not exercise its right not to offer a successor franchise in accordance with Section 19.5 below and if the Franchisee:
- a. At least 30 days prior to expiration of the term, executes the form of Franchise Agreement then in use by the Franchisor;
- b. Has substantially complied with all provisions of this Agreement during the current term, including the payment on a timely basis of all Royalties, National Marketing Contributions and other fees due hereunder. "Compliance" shall mean, at a minimum, that the Franchisee has not received any written notification from the Franchisor of breach hereunder more than four times during the term hereof;
- c. Upgrades and/or remodels the FLOYD'S 99 Shop and its operations at the Franchisee's sole expense (the necessity of which shall be in the sole discretion of the Franchisor) to conform with the then current Operations Manual;
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, compliance with the Franchise Agreement is specifically defined in the context of renewing the franchise for an additional term. To be eligible for renewal, a franchisee must demonstrate substantial compliance with all provisions of the existing agreement during its current term.
Specifically, Floyds 99 states that 'Compliance' means the franchisee must not have received more than four written notifications from the Franchisor regarding breaches of the agreement during the entire current term. This includes timely payments of all royalties, national marketing contributions, and other fees.
In addition to limiting the number of breach notifications, Floyds 99 also requires the franchisee to execute the then-current form of the Franchise Agreement and to upgrade or remodel the Floyds 99 shop to conform with the most recent Operations Manual, the necessity of which is determined at the sole discretion of Floyds 99. Meeting these conditions ensures that the franchisee remains in good standing and is eligible to continue operating under the Floyds 99 brand for another term.