Does Floyds 99 grant franchisees a protected territory?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
forth in Exhibit I. In such circumstances, the Franchisee shall select and propose to the Franchisor for the Franchisor's prior approval a specific location for the Franchised Location which, once approved by the Franchisor, shall then be described in the rider to Exhibit I.
- 3.2 Protected Territory. Subject to the Franchisor's reservation of rights described in Section 3.4 below, the Franchisor shall not establish and operate, or franchise another person or entity to establish and operate, a FLOYD'S 99 Shop within the geographic area described in Exhibit I, attached hereto (the "Protected Territory"). Once Franchisor has defined the Protected Territory, Franchisee will have no further territorial or other rights in those portions of the Designated Area that are located outside of the Protected Territory.
- 3.3 Limitation on Franchise Rights; Relocation. The rights that are granted to the Franchisee are for the specific Franchised Location and cannot be transferred to an alternative Franchised Location, or any other location, without the prior written approval of the Franchisor, which approval shall not be unreasonably withheld. The Franchisee shall not operate another business, offer services or products which are part of the Licensed Methods at any site other than the Franchised Location (except for other Franchised Locations covered by other Franchise Agreements with the Franchisee), fill wholesale orders, sell products or services by mail order or through catalogs or the Internet, transship or reship products, or offer any other type of off-site service or sale of products. If Franchisee desires to relocate the FLOYD'S 99 Shop or is unable to continue the operation of the FLOYD'S 99 Shop at the Franchised Location because of damage to or destruction of the FLOYD'S 99 Shop, then Franchisee may request Franchisor's approval to relocate the FLOYD'S 99 Shop to another location in the Protected Territory, which approval shall not be unreasonably withheld. If Franchisor grants Franchisee the right to relocate the FLOYD'S 99 Shop, then Franchisee shall comply with the site selection and construction procedures set forth in Article 5 and pay Franchisor the then-current relocation fee.
- 3.4 Franchisor's Reservation of Rights. The Franchisee acknowledges that its franchise rights as granted are non-exclusive and that the Franchisor, for itself and its successors and affiliates, retains the rights, among others:
- a. to use, and to license others to use, the Marks and Licensed Methods in connection with the operation of FLOYD'S 99 Shops, at any location except within the Protected Territory;
- b. to use the Marks to identify any type of services and products, promotional and marketing efforts or related items, and to identify products and services distributed or otherwise made available through alternative channels of distribution other than through FLOYD'S 99 Shops, at any location, whether within or outside of the Protected Territory, including but not limited to, at temporary events and venues or by way of wholesale distribution, Internet marketing or distribution, by mail order, catalog sales, social media marketing, telemarketing, other direct marketing or retail store product display;
- c. to use and license others to use the Marks and Licensed Methods within or outside the Protected Territory in connection with the operation of Barbershops within "Captive Audience Facilities" which are defined as facilities where people are congregating for a primary purpose unrelated to the Barbershop business, creating significant foot traffic in the facility, including airports and other transportation hubs, hospitals, college campuses, convention centers, grocery stores, department stores, resorts and hotels and within office buildings, but not including lifestyle centers, town centers, "big box" retail centers and regional shopping malls.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, franchisees are granted a protected territory. Section 3.2 of the franchise agreement states that Floyds 99 will not establish or franchise another entity to operate a shop within the geographic area defined in Exhibit I, which is referred to as the "Protected Territory." However, this protection is subject to certain rights reserved by Floyds 99. Once the Protected Territory is defined, the franchisee has no further territorial rights outside of it.
Floyds 99 retains specific rights, including the right to use and license others to use their marks and methods outside the Protected Territory. They can also use the marks to identify services and products through alternative channels of distribution, such as wholesale, internet marketing, or mail order, regardless of location. Furthermore, Floyds 99 reserves the right to operate barbershops within "Captive Audience Facilities" like airports, hospitals, and college campuses, even within a franchisee's Protected Territory.
If a Captive Audience Facility opportunity arises within a franchisee's Protected Territory, Floyds 99 will notify the franchisee, giving them the first chance to develop and operate the barbershop under the terms negotiated by Floyds 99. The franchisee has 15 days to respond. If the franchisee declines, Floyds 99 or another franchisee may be granted the right to develop the location, and the original franchisee will have no further rights to that specific location during the contract term with the Captive Audience Facility. This reservation of rights means that while franchisees have some territorial protection, Floyds 99 retains considerable flexibility to expand its brand through other channels and in specific venues.