Does the Floyds 99 FDD include an Exhibit IV to the Development Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.3 Franchise Agreement First Barbershop Developed. The parties acknowledge that the Franchise Agreement, attached hereto as Exhibit IV and by this reference incorporated herein, governing the operation of Developer's first Barbershop to be opened hereunder, is being executed concurrently with this Agreement. Developer agrees to comply with the terms and conditions of the Franchise Agreement as a part of its obligations hereunder and acknowledges that failure to execute and comply with such Franchise Agreement is a breach of this Agreement.
- 2.4 Subsequent Franchise Agreements. The parties agree that a separate Franchise Agreement shall be executed by the parties to this Agreement for each FLOYD'S 99 Shop developed under this Agreement. The Franchise Agreement for the second and subsequent Barbershops will be executed within 10 days after Franchisor's approval of a location for each such Barbershop. Developer's failure to execute any additional Franchise Agreements or its default in any term of such Franchise Agreements may, at the option of Franchisor, be deemed a default under this Agreement and shall entitle Franchisor to terminate this Agreement as further provided in Article 4 below. Each Franchise Agreement to be executed by Developer for each Barbershop to be developed hereunder shall be in a form substantially similar to the Franchise Agreement being executed herewith, although Franchisor reserves the right to change provisions of the Franchise Agreement to conform with the then current Franchise Agreement being offered to new franchisees of Franchisor. Notwithstanding the foregoing, Franchisor agrees that it will not charge 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.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 FDD, the Development Agreement includes Exhibit IV, which is the Franchise Agreement. The FDD states that the Franchise Agreement governs the operation of the Developer's first Barbershop. Floyds 99 requires the Developer to comply with the terms and conditions of the Franchise Agreement as part of their obligations under the Development Agreement. Failure to comply with the Franchise Agreement constitutes a breach of the Development Agreement.
For each subsequent Floyds 99 shop developed under the Development Agreement, a separate Franchise Agreement will be executed. These agreements must be executed within 10 days after Floyds 99 approves the location for each shop. Failure to execute additional Franchise Agreements or defaulting on any terms may be considered a default under the Development Agreement, potentially leading to termination of the agreement at Floyds 99's discretion.
The Franchise Agreement for subsequent Barbershops will be substantially similar to the initial Franchise Agreement, but Floyds 99 retains the right to change provisions to align with the current Franchise Agreement offered to new franchisees. However, Floyds 99 agrees not to increase the initial franchise fee beyond the amounts specified in the Development Agreement and will not increase the royalty percentage beyond the rate charged in the initial Franchise Agreement. The franchisee should note that Floyds 99 has the right to charge then-current published rates for advertising contributions and optional products and services.