Does the Floyds 99 Franchisor have any obligation to grant additional franchises to the Developer after termination or expiration of the Development Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Loss of Development Rights. Upon termination or expiration of this Agreement for any reason, the development rights granted to Developer under this Agreement will automatically terminate and Developer agrees to immediately and permanently cease its development activities. Franchisor will then have no further obligation to grant Developer additional franchises for FLOYD'S 99 Shops and Franchisor will be free to establish and operate, and grant other persons franchises to establish and operate, FLOYD'S 99 Shops within the former Development Area.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, upon termination or expiration of the Development Agreement, Floyds 99 has no further obligation to grant the Developer additional franchises. The Developer's rights to develop Floyds 99 shops automatically terminate, and they must cease all development activities. Floyds 99 is then free to establish and operate its own shops or grant franchises to others within the former Development Area.
This means that a developer who fails to meet their development schedule or whose agreement is terminated for any reason loses all rights to further expand the Floyds 99 brand within their designated area. This could have significant financial implications, especially if the developer has invested heavily in infrastructure or resources to support the planned expansion.
It is important for prospective developers to carefully consider the terms of the Development Agreement, including the development schedule and termination conditions, to fully understand the risks and obligations involved. Developers should also be aware of any state or federal laws that may affect their rights regarding termination or expiration of the agreement, as these laws would supersede the agreement's terms if inconsistencies exist.