Can a Floyds 99 franchisee own stock in a publicly traded Competitive Business?

According to Floyds 99's 2025 Franchise Disclosure Document, a franchisee is not prohibited from owning securities in a Competitive Business under certain conditions. 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 the sale of hair care products.

However, the franchisee can own stock in a Competitive Business if the securities are listed on a stock exchange or traded on the over-the-counter market. This exception applies only if the securities represent 5% or less of that class of securities issued and outstanding. This means a Floyds 99 franchisee can invest in a publicly traded competitor, but their ownership stake must remain relatively small.

This allowance provides some flexibility for franchisees to diversify their investments without necessarily conflicting with their commitment to Floyds 99. However, it's crucial for franchisees to remain below the 5% threshold to avoid violating the franchise agreement. This restriction also applies post-termination of the franchise agreement within a specified radius of Floyds 99 locations for a period of two years.