What are some examples of non-curable defaults that could lead to termination of a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 19.1 | 10 years |
| b. | Renewal or extension of the | Sections 19.3 and | Term in then-current Franchise |
| term | 19.4 | Agreement. | |
| c. | Requirements for franchisee to renew or extend | Section 19.3 | Remodel, pay fee, sign new agreement and release. You may be asked to sign a contract with materially different terms and conditions than your original contract if you choose to renew. |
| d. | Termination by franchisee | Not Applicable | Not Applicable |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with | Sections 20.1 and | We can terminate only if you commit |
| cause | 20.2 | any one of several listed violations. | |
| g. | “Cause” defined – curable | Sections 20.1 and | 30 days for operational defaults, 10 |
| defaults | 20.2 | days for monetary defaults. | |
| h. | “Cause” defined – non-curable defaults | Section 20.1 | Unauthorized disclosure, conviction of a crime, abandonment, unapproved transfers, bankruptcy, assignment for benefit of creditors, unsatisfied judgments, levy, foreclosure, repeated violations, misuse of Marks. |
| i. | Franchisee’s obligations on termination / nonrenewal | Section 20.4 | Pay outstanding amounts, de- identification of the Barbershop, return of confidential information, covenant not to compete (see also r. below). |
| j. | Assignment of contract by franchisor | Section 18.6 | No restriction on our right to assign. |
| k. | “Transfer” by franchisee – definition | Section 18.1 | Includes transfer of Franchise Agreement or of the Barbershop or its |
| Provision | Section in Development Agreement | Summary Agreement or other agreements, notice of termination of Franchise Agreement delivered to Developer by Franchisor or Developer terminates a Franchise Agreement without cause. | |
| i. | Franchisee’s obligations on termination / nonrenewal | Section 9.3 | Loss of development rights, cease use of Marks and confidential information except in connection with Barbershops currently operating; covenant not to compete. |
| j. | Assignment of contract by franchisor | Section 8.6 | No restriction on our right to assign. |
| k. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–49)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, certain defaults are considered non-curable and can lead to immediate termination of the franchise agreement. These include actions like unauthorized disclosure of confidential information, conviction of a crime, abandoning the franchise, engaging in unapproved transfers of ownership, or facing bankruptcy. Other non-curable defaults are assignment for the benefit of creditors, having unsatisfied judgments, facing a levy or foreclosure, repeated violations of the franchise agreement, and misuse of Floyds 99's trademarks.
For a Floyds 99 franchisee, understanding these non-curable defaults is crucial. Unlike curable defaults, where the franchisee has an opportunity to correct the issue within a specified timeframe, non-curable defaults result in immediate termination. This means that actions like mishandling proprietary information or failing to comply with brand standards can have severe consequences.
It is important to note that the Development Agreement also lists non-curable defaults. These include material misrepresentation, failure to meet the development schedule, conviction of a crime, failure to pay amounts due to the Franchisor, unapproved transfers, misuse of Marks, death or disability of Developer, unauthorized disclosure, noncompliance with restrictive covenants, terrorist activities, bankruptcy, assignment for benefit of creditors, default under Franchise Agreement or other agreements, notice of termination of Franchise Agreement delivered to Developer by Franchisor or Developer terminates a Franchise Agreement without cause.
Prospective franchisees should carefully review Section 20.1 of the Franchise Agreement and Section 9.1 of the Development Agreement, as referenced in Item 17 of the FDD, to fully understand their obligations and the potential consequences of non-compliance. Seeking legal counsel to interpret these provisions is advisable before entering into a franchise agreement with Floyds 99.