Does the Floyds 99 General Release apply to affiliates of the Franchisee?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS GENERAL RELEASE ("Release") is made effective as of the day of, 20 by ("Franchisee") in favor of FLOYD'S 99 FRANCHISING, LLC, a Colorado limited liability company ("Franchisor") (collectively referred to as "Parties"). The Parties have entered into that certain Franchise Agreement dated ("Franchise Agreement") which governs the development and operation of a FLOYD'S 99 Barbershop ("FLOYD'S 99 Shop" or "Barbershop") (to the extent not otherwise defined herein, all initial-capitalized references shall have the same meaning as set forth in the Franchise Agreement). The Franchisee desires to transfer the Franchise Agreement, the ownership of the Franchisee, or the FLOYD'S 99 Shops or some or all of the assets of the Barbershop.
OR
The Franchisee desires to enter into a successor to the Franchise Agreement.
The Franchisor desires to consent to the Franchisee's request subject to the Franchisee's compliance with the terms and conditions set forth in the Franchise Agreement including, without limitation, the execution and delivery by the Franchisee to the Franchisor of this Release.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
Based on the 2025 Floyds 99 Franchise Disclosure Document, Exhibit K outlines the General Release required by Floyds 99 Franchising, LLC. This release is executed by the franchisee in favor of Floyds 99 Franchising, LLC, when the franchisee desires to transfer the Franchise Agreement, ownership, or assets of the barbershop, or enter into a successor agreement. The franchisor's consent to the franchisee's request is contingent upon the franchisee's compliance with the terms of the Franchise Agreement, including the execution and delivery of the General Release.
The General Release itself, as described in the FDD, does not explicitly mention whether it applies to the franchisee's affiliates. The document focuses on the relationship between the franchisee and Floyds 99 Franchising, LLC, particularly in the context of transferring ownership or entering into successor agreements. The purpose of the release is to ensure that the franchisor's interests are protected during such transitions.
However, addenda for specific states like Maryland and Minnesota modify the applicability of general releases. For example, in Maryland, the general release required for renewal, sale, or transfer does not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. Similarly, in Minnesota, any release executed will not apply to claims arising under the Minnesota Franchise Act. These state-specific provisions suggest that the scope and applicability of the general release can vary and may not extend to all potential claims or parties.
Therefore, a prospective Floyds 99 franchisee should carefully review Exhibit K and any state-specific addenda to fully understand the scope and implications of the General Release. It is crucial to clarify with Floyds 99 Franchising, LLC, whether the release extends to the franchisee's affiliates and under what circumstances, as the FDD does not provide explicit details on this matter. Understanding the full extent of the release is essential for assessing potential liabilities and protecting the franchisee's interests.