Does the Floyds 99 Development Agreement grant exclusive rights to the Developer?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
rge an initial franchise fee to Developer that is greater than the amounts set forth herein and will not increase the Royalty percentage to a rate that is greater than the rate charged to Developer in the Franchise Agreement being executed herewith. Developer acknowledges that Franchisor has the right, however, to charge then current published rates for advertising contributions and optional products and services offered to Developer in accordance with Franchisor's then current franchise disclosure document. The form of the Franchise Agreement attached as Exhibit IV and any future forms of Franchise Agreements referred to in this Section will also be included in the term "Franchise Agreement" as used in this Agreement.
3. TERM AND OWNERSHIP OF BUSINESS
- 3.1 Term. The term of this Agreement shall commence as of the date of execution hereof and shall end on the earlier of the last Development Deadline set forth in Section 5.1 below or the date on which the last Barbershop set forth in Section 5.1 below opens for business. After expiration of the term, or earlier termination of this Agreement as provided below, Franchisor shall have the right to establish, or license any other party to establish Barbershops anywhere within the Development Area;
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the Development Agreement grants development rights within a specific area, but these rights are not permanently exclusive. Section 3.1 states that after the agreement's term ends (either by the last development deadline or when the last barbershop opens), Floyds 99 has the right to establish or license others to establish barbershops within the Development Area. However, the Developer's Protected Territory, as defined in the Franchise Agreements, remains in effect for the term of those agreements, unless terminated sooner.
This means that while the Development Agreement is active, the developer has certain protections, but these expire once the development obligations are complete or the agreement is terminated. After that, Floyds 99 can operate or franchise new locations in the same area, potentially in competition with the developer's existing Floyds 99 shops. The developer's exclusive territory only applies to the specific locations they have franchised, and only for the duration of those individual franchise agreements.
Section 5.2(b) further clarifies that if the Developer fails to meet the Development Schedule, Floyds 99 can operate or grant franchises to others to operate Floyds 99 Shops within the Development Area. This clause underscores the importance of adhering to the agreed-upon development timeline. Failure to do so can result in the loss of development rights and the introduction of competing Floyds 99 locations within the area originally designated for the developer.
In summary, the Floyds 99 Development Agreement provides a limited period of exclusivity tied to the developer's performance and the agreement's term. Once these conditions are no longer met, Floyds 99 retains the right to expand within the same Development Area, either directly or through other franchisees. Prospective developers should carefully consider the implications of these terms and the importance of meeting the Development Schedule to maintain their development rights.