Why did Floyds 99 Franchising, LLC pay the settlement amount?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
lution/Columbia Care) in Denver, Colorado.
ITEM 3. LITIGATION
Matthew Chavez and Nicole Deis v. Roise Barbers, Inc., Jonathan M. Roise, Floyd's 99 Holdings, LLC and Floyd's 99 Franchising, LLC, No. 37-2020-00040793-CU-OE-CTL (Superior Court of the State of California for the County of San Diego, filed November 6, 2020). On March 27, 2023, Plaintiffs filed a Second Amended Class Action Complaint to add Floyd's 99 Holdings, LLC and Floyd's 99 Franchising, LLC as defendants to the lawsuit previously filed against Roise Barbers, Inc., a FLOYD'S 99 franchisee,
and Jonathan Roise. Plaintiffs are former employees of Roise Barbers, Inc., and sought damages, relief and restitution under California law for alleged employment and labor violations. Plaintiffs alleged that Floyd's 99 Franchising, LLC was liable as a joint employer or co-employer with Roise Barbers, Inc. On June 14, 2023, Floyd's 99 Holdings, LLC was removed from the litigation when it was dismissed without prejudice. On September 6, 2024, Floyd's 99 Franchising, LLC paid $2,500 as part of a larger settlement with Defendants in order to avoid additional attorneys' fees and all parties entered into a Settlement and Release Agreement. On Dec
Source: Item 3 — LITIGATION (FDD pages 13–14)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, Floyds 99 Franchising, LLC was involved in a lawsuit, Matthew Chavez and Nicole Deis v. Roise Barbers, Inc., et al., in the Superior Court of the State of California for the County of San Diego. The plaintiffs, former employees of a Floyds 99 franchisee (Roise Barbers, Inc.), alleged employment and labor violations and claimed that Floyds 99 Franchising, LLC was liable as a joint employer or co-employer with the franchisee. Floyds 99 Holdings, LLC was initially named in the suit but was later dismissed without prejudice.
To avoid incurring further legal costs, Floyds 99 Franchising, LLC chose to settle the matter. On September 6, 2024, Floyds 99 Franchising, LLC paid $2,500 as part of a larger settlement with the defendants. In return, all parties involved entered into a Settlement and Release Agreement. Subsequently, on December 12, 2024, the court dismissed the lawsuit without prejudice.
This situation highlights a potential risk for franchisees and franchisors alike. Franchisors can be drawn into legal disputes involving their franchisees, particularly concerning employment-related issues. Even if the franchisor believes they are not directly liable, the cost of defending against such claims can be significant. This settlement suggests that Floyds 99 deemed it more economical to settle the case for $2,500 rather than continue to accrue attorneys' fees, regardless of the merits of the plaintiffs' claims. For a prospective franchisee, this underscores the importance of understanding the legal and operational relationship between the franchisor and its franchisees, as well as the potential for vicarious liability.