Must a Floyds 99 franchisee agree to abide by the post-termination covenant not to compete as a condition of transfer?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
tion to the Franchisor sufficient for the Franchisor to assess the proposed transferee's business experience, aptitude and financial qualification, and the Franchisor shall have ascertained that the proposed transferee meets such qualifications;
- f. Execution by Franchisee of a general release, in a form satisfactory to the Franchisor, of any and all claims against the Franchisor, its affiliates and their respective officers, directors, employees and agents;
- g. Payment by the Franchisee or the proposed transferee of $7,500;
- h. Neither the proposed transferee nor any of its direct or indirect owners or affiliates operates, has an ownership interest in or performs services for a Competitive Business; and
- i. Agreement by the Franchisee to abide by the post-termination covenant not to compete set forth in Section 22.2 below.
The Franchisor will not unreasonably withhold, delay or condition its consent to any proposed transfer by the Franchisee which requires the Franchisor's consent under this Section 18.2.
18.3 Franchisor's Approval of Transfer. The Franchisor has 90 days from the date of the written notice of the proposed transfer to approve or disapprove in writing, of the Franchisee's proposed transfer. The Franchisee acknowledges that the proposed transferee shall be evaluated for approval by the Franchisor based on the same criteria as is currently being used to assess new franchisees of the Franchisor and that such proposed transferee shall be provided, if appropriate, with such dis
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, a franchisee must agree to abide by the post-termination covenant not to compete as a condition of transfer. Specifically, the franchisee must agree to the post-termination covenant not to compete as outlined in Section 22.2 of the franchise agreement.
In addition to agreeing to the non-compete, the proposed transfer must meet other conditions. The franchisee or proposed transferee must pay Floyds 99 a fee of $7,500. Also, neither the proposed transferee, nor any of its direct or indirect owners or affiliates, can operate, have an ownership interest in, or perform services for a Competitive Business.
Floyds 99 will not unreasonably withhold, delay, or condition its consent to any proposed transfer by the franchisee which requires Floyds 99's consent under Section 18.2 of the franchise agreement. Floyds 99 has 90 days from the date of the written notice of the proposed transfer to approve or disapprove, in writing, the franchisee's proposed transfer. If the franchisee and the proposed transferee comply with all conditions for assignment and Floyds 99 has not given the franchisee notice of its approval or disapproval within the 90-day period, approval is deemed granted.