What is the 'Franchise Agreement' referring to in the Floyds 99 Conditional Assignment of Lease agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
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- A Franchise Agreement ("Franchise Agreement"; the Development Agreement and Franchise Agreement are collectively referred to as the "Agreements"), the form of which is attached as Exhibit C to the FDD provided to Prospective Franchisee as noted above. The Agreements were provided to Prospective Franchisee as a condition of purchasing a franchise on ______, 202.
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 Franchise Disclosure Document, the 'Franchise Agreement' in the context of the Conditional Assignment of Lease is the agreement, the form of which is attached as Exhibit C to the FDD. This agreement, along with the Development Agreement, dictates the terms and conditions under which a prospective franchisee purchases a Floyds 99 franchise. The agreements were provided to Prospective Franchisee as a condition of purchasing a franchise on ______, 202.
In the context of multi-unit development, Floyds 99 requires a separate Franchise Agreement for each barbershop developed under the Development Agreement. These subsequent agreements must be executed within 10 days after Floyds 99 approves the location for each barbershop. The terms of these subsequent Franchise Agreements will be substantially similar to the initial agreement, although Floyds 99 retains the right to update provisions to match the current standard Franchise Agreement offered to new franchisees.
Floyds 99 ensures that the initial franchise fee and royalty percentage for multi-unit developers will not exceed the amounts in the original Franchise Agreement. However, Floyds 99 can charge then-current rates for advertising contributions and optional products and services. The FDD clarifies that the term 'Franchise Agreement' includes both the initial agreement (Exhibit IV) and any future versions referenced in the Development Agreement.