What are the franchisor's options if a Floyds 99 developer defaults on the development schedule?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
be entitled to a refund, return or rebate of any portion of initial franchise fees or Development Fees paid hereunder.
5. DEVELOPMENT OBLIGATIONS
- 5.1 Development Schedule. Acknowledging that time is of the essence, Developer agrees to exercise its development rights according to the development schedule set forth on Exhibit I to this Agreement (the "Development Schedule") and as otherwise set forth herein. Developer must construct, open and maintain in continuous operation a minimum number of FLOYD'S 99 Shops in the Development Area within the time periods mandated by the Development Schedule. Developer's failure to adhere to the Development Schedule (including any extensions approved by Franchisor in writing) will constitute a material breach of this Agreement.
- 5.2 Effect of Failure. Strict compliance with the Development Schedule is of the essence. If Developer fails to construct and open any FLOYD'S 99 Shop or maintain the cumulative number of FLOYD'S 99 Shops open and operating in accordance with the Development Schedule, then Developer will be in default. Any such default constitutes a material breach of this Agreement and Franchisor may, in Franchisor's sole discretion, elect to:
- (a) terminate this Agreement;
- (b) operate or grant franchises to others to operate FLOYD'S 99 Shops within the D
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, a developer's failure to adhere to the development schedule constitutes a material breach of the agreement. In the event of such a default, Floyds 99 has several options it may elect, at its sole discretion.
First, Floyds 99 can terminate the development agreement entirely. Second, Floyds 99 can choose to operate or grant franchises to other parties within the developer's designated area. Third, Floyds 99 may grant the developer up to two extensions of the development schedule, each lasting six months. The first extension is free, but the second requires the developer to pay a non-refundable $5,000 extension fee.
Finally, Floyds 99 can reduce the size of the development area and adjust the development schedule to a scale that it believes the developer can manage while still adhering to the agreement. It is important to note that any extensions to the schedule are subject to Floyds 99's extension policy, which may change and could involve additional fees for the developer.