Can a Floyds 99 franchisee own stock in a Competitive Business during the term of the agreement?

According to the 2025 Floyds 99 Franchise Disclosure Document, a franchisee is generally restricted from having a direct or indirect controlling interest in a Competitive Business during the term of the Franchise Agreement. A "Competitive Business" is defined as any business operating or franchising a retail hair care business deriving more than 5% of its gross sales from haircuts or hair care products, or a wholesale business deriving more than 5% of its gross sales from hair care product sales. This restriction extends not only to the franchisee but also to their officers, directors, shareholders, principal managers, barbershop managers, equity owners, members, managers, partners, and their immediate families.

However, there is an exception to this restriction. A Floyds 99 franchisee is permitted to own securities in a Competitive Business if those securities are listed on a stock exchange or traded over-the-counter, provided that the franchisee's ownership represents 5% or less of that class of securities issued and outstanding. This exception allows franchisees to invest in publicly traded companies that may be considered competitive to Floyds 99, as long as the investment remains below the specified threshold.

This policy balances the franchisor's need to protect its business model and market position with the franchisee's right to make personal investments. The restriction on controlling interests in competitive businesses ensures that franchisees remain committed to the success of their Floyds 99 shop and do not divert resources or knowledge to competing ventures. The exception for minor stock ownership provides franchisees with some flexibility in their investment strategies without posing a significant threat to the Floyds 99 brand.