What is the 'Franchise Agreement' referring to in the context of the Floyds 99 Conditional Assignment of Lease?
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 Franchise Disclosure Document, the 'Franchise Agreement' in the context of the Conditional Assignment of Lease refers to the agreement governing the operation of the franchisee's barbershop. Specifically, the Franchise Agreement, included as Exhibit IV, is executed concurrently with the Development Agreement for the first barbershop. The franchisee (referred to as the Developer in this context) must comply with the terms of the Franchise Agreement, and failure to do so constitutes a breach of the Development Agreement.
For subsequent barbershops developed under the Development Agreement, a separate Franchise Agreement will be executed for each Floyds 99 shop. These subsequent agreements must be executed within 10 days of Floyds 99 Franchising's approval of the location. Failure to execute these additional Franchise Agreements or any default in their terms can be deemed a default under the Development Agreement, potentially leading to termination of the Development Agreement at Floyds 99's option.
While the Franchise Agreements for subsequent barbershops will be substantially similar to the initial Franchise Agreement, Floyds 99 Franchising retains the right to modify provisions to align with the current Franchise Agreement offered to new franchisees. However, Floyds 99 Franchising agrees not to increase the initial franchise fee or royalty percentage beyond what is stated in the initial Franchise Agreement. The term "Franchise Agreement" as used in the Development Agreement includes both the form attached as Exhibit IV and any future forms of Franchise Agreements referred to in this section.