What does the Development Fee for a Floyds 99 franchise represent payment for?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
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incorporated herein, is true, complete, accurate and not misleading, and, in accordance with the information contained in the Statement of Ownership, the controlling ownership of the FLOYD'S 99 developer business is held by Developer. Developer shall promptly provide Franchisor with a written notification if the information contained in the Statement of Ownership changes at any time during the term of this Agreement and shall comply with the applicable transfer provisions contained in Article 8 herein and in the Franchise Agreement. In addition, if Developer is an entity, all of the owners of Developer shall sign the Guaranty and Assumption of Developer's Obligations attached hereto as Exhibit II.
4. INITIAL FRANCHISE AND DEVELOPMENT FEES
4.1 Fees. Concurrently with the execution of this Agreement, Franchisor acknowledges that in consideration of the development rights gr
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the Development Fee compensates Floyds 99 for granting development rights to the developer. Specifically, the Development Fee covers administrative and other expenses incurred by Floyds 99. It also accounts for development opportunities that Floyds 99 forgoes or postpones because they have granted the developer exclusive rights to a specific Development Area.
For each of the first and second Floyds 99 shops to be developed, the Development Fee is $49,500. For each remaining barbershop to be developed, the fee is $34,500. Floyds 99 considers the Development Fee fully earned upon receipt, meaning the franchisee cannot get a refund under any circumstances.
This arrangement is typical in multi-unit development franchise agreements. The non-refundable nature of the fee emphasizes the importance of carefully evaluating the market and the franchisee's ability to meet the development schedule before signing the agreement and paying the fee. Prospective franchisees should fully understand the obligations and risks associated with area development before committing to this type of agreement with Floyds 99.