What is the definition of 'Franchisor's Management Rights' regarding a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor determines in its sole judgment that the operation of the Franchisee's FLOYD'S 99 Shop is not being conducted or managed properly, is not being operated by an individual who has successfully completed Franchisor's mandatory initial training program, or if a default occurs, then to prevent an interruption of the operation of Franchisee's FLOYD'S 99 Shop which would cause harm to the FLOYD'S 99 system and thereby lessen its value, Franchisee authorizes Franchisor to appoint an interim Principal Manager to operate and manage Franchisee's FLOYD'S 99 Shop for as long as Franchisor deems necessary and practical, and without waiver of any other rights or remedies which Franchisor may have under this Agreement ("Franchisor's Management Rights").
In Franchisor's sole judgment, Franchisor may deem Franchisee incapable of operating Franchisee's FLOYD'S 99 Shop if, without limitation, Franchisee is absent or incapacitated by reason of illness or death; Franchisee has failed to pay when due or has failed to remove any and all liens or encumbrances of every kind placed upon or against the Franchisee's FLOYD'S 99 Shop; or Franchisor determines that operational problems require that Franchisor appoint an interim Principal Manager to operate and manage Franchisee's FLOYD'S 99 Shop for a period of time that Franchisor determines, in its sole discretion, to be necessary to maintain the operation of the Franchisee's FLOYD'S 99 Shop as a going concern.
- b.
Franchisor shall keep in a separate account all monies generated by the operation of the Franchisee's FLOYD'S 99 Shop, less the expenses of Franchisee's FLOYD'S 99 Shop, including reasonable compensation and expenses for Franchisor's representatives.
Franchisor has the right to charge a reasonable management fee (in addition to the Royalties, National Marketing Contributions and other amounts payable under this Agreement) during the period that Franchisor's appointed Principal Manager manages Franchisee's FLOYD'S 99 Shop.
If Franchisor exercises Franchisor's Management Rights, Franchisee agrees to hold harmless Franchisor and its representatives for all actions occurring during such temporary operation.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, 'Franchisor's Management Rights' refers to the franchisor's authority to appoint an interim Principal Manager to operate and manage a franchisee's Floyds 99 shop. This can occur if the franchisor determines, in its sole judgment, that the shop is not being properly managed, is not being operated by someone who completed the mandatory initial training, or if a default occurs. The purpose of this right is to prevent an interruption of the shop's operation, which could harm the Floyds 99 system and lessen its value.
The franchisor may deem a franchisee incapable of operating the shop if the franchisee is absent or incapacitated due to illness or death, has failed to pay debts or remove liens, or if operational problems necessitate the appointment of an interim manager. The franchisor determines the length of time the interim Principal Manager will operate the shop, in its sole discretion, to maintain the operation as a going concern.
During the period when the franchisor exercises these management rights, they will keep all generated monies in a separate account, deducting the shop's expenses, including reasonable compensation and expenses for the franchisor's representatives. The franchisor also has the right to charge a reasonable management fee, in addition to royalties, national marketing contributions, and other amounts payable under the Franchise Agreement. The franchisee agrees to hold harmless the franchisor and its representatives for all actions occurring during this temporary operation.