What happens to a Floyds 99 developer's covenant not to compete upon termination?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| i. | Franchisee's obligations on termination / nonrenewal | Section 9.3 | Loss of development rights, cease use of Marks and confidential information except in connection with Barbershops currently operating; covenant not to compete. |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 11.2 | No competing business for 2 years within 25 miles of your FLOYD'S 99 Shops or any other FLOYD'S 99 Shop. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–49)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, if the Development Agreement is terminated, the developer is subject to a covenant not to compete. Specifically, the developer cannot engage in a competing business for 2 years within 25 miles of their Floyds 99 shops or any other Floyds 99 shop. This obligation is part of the franchisee's responsibilities upon termination or non-renewal of the agreement.
This non-compete clause means that a former Floyds 99 developer is restricted from opening or working for a competing barbershop within a defined geographic area for a specific period. This is designed to protect Floyds 99's market share and brand recognition. The restriction applies not only to locations developed by the franchisee but also to any other Floyds 99 location, which broadens the scope of the non-compete.
Such post-termination non-compete agreements are common in franchising to protect the franchisor's business model and customer base. Prospective Floyds 99 developers should carefully consider the implications of this restriction, especially if they have significant experience or interest in the barbering industry. They should evaluate whether the geographic and time limitations would unduly restrict their future business opportunities should the Development Agreement be terminated.