What is the effect of the Franchisee's execution and delivery of the Floyds 99 General Release to the Franchisor?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS GENERAL RELEASE ("Release") is made effective as of the day of, 20 by ("Franchisee") in favor of FLOYD'S 99 FRANCHISING, LLC, a Colorado limited liability company ("Franchisor") (collectively referred to as "Parties"). The Parties have entered into that certain Franchise Agreement dated ("Franchise Agreement") which governs the development and operation of a FLOYD'S 99 Barbershop ("FLOYD'S 99 Shop" or "Barbershop") (to the extent not otherwise defined herein, all initial-capitalized references shall have the same meaning as set forth in the Franchise Agreement). The Franchisee desires to transfer the Franchise Agreement, the ownership of the Franchisee, or the FLOYD'S 99 Shops or some or all of the assets of the Barbershop.
OR
The Franchisee desires to enter into a successor to the Franchise Agreement.
The Franchisor desires to consent to the Franchisee's request subject to the Franchisee's compliance with the terms and conditions set forth in the Franchise Agreement including, without limitation, the execution and delivery by the Franchisee to the Franchisor of this Release.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties hereby agree as follows:
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the franchisor requires a general release from the franchisee under certain circumstances. Specifically, Floyds 99 requires the franchisee to execute and deliver a General Release to the franchisor when the franchisee desires to transfer the Franchise Agreement, the ownership of the Franchisee, the Floyds 99 Shops, or some or all of the assets of the Barbershop. It is also required if the franchisee desires to enter into a successor to the Franchise Agreement.
The franchisor's consent to the franchisee's request is subject to the franchisee's compliance with the terms and conditions set forth in the Franchise Agreement, including the execution and delivery of this release. The General Release is made in consideration of the mutual promises and other valuable consideration, the receipt and sufficiency of which are acknowledged by both parties.
However, the FDD also includes state-specific addenda that may limit the enforceability of such releases. For example, in Maryland, the general release required as a condition of transferring the franchise may not be enforceable. Similarly, in Indiana, any releases signed will not apply to claims arising under the Indiana Franchise Disclosure Law and the Indiana Deceptive Practices Act. In Minnesota, any release executed will not apply to any claims that may arise under the Minnesota Franchise Act. These state-specific provisions are crucial for prospective franchisees to understand, as they can significantly impact their rights and obligations.
Therefore, while Floyds 99 uses a General Release in connection with franchise transfers or successor agreements, its actual effect can vary depending on the state in which the franchise operates, due to specific state franchise laws that may limit or negate the release's enforceability. Prospective franchisees should carefully review the state-specific addenda and consult with legal counsel to fully understand the implications of signing a General Release in their particular state.