What happens to a Floyds 99 developer's rights if the Development Agreement is terminated?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 19.1 | 10 years |
| b. | Renewal or extension of the | Sections 19.3 and | Term in then-current Franchise |
| term | 19.4 | Agreement. | |
| c. | Requirements for franchisee to renew or extend | Section 19.3 | Remodel, pay fee, sign new agreement and release. You may be asked to sign a contract with materially different terms and conditions than your original contract if you choose to renew. |
| d. | Termination by franchisee | Not Applicable | Not Applicable |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with | Sections 20.1 and | We can terminate only if you commit |
| cause | 20.2 | any one of several listed violations. | |
| g. | “Cause” defined – curable | Sections 20.1 and | 30 days for operational defaults, 10 |
| defaults | 20.2 | days for monetary defaults. | |
| h. | “Cause” defined – non-curable defaults | Section 20.1 | Unauthorized disclosure, conviction of a crime, abandonment, unapproved transfers, bankruptcy, assignment for benefit of creditors, unsatisfied judgments, levy, foreclosure, repeated violations, misuse of Marks. |
| i. | Franchisee’s obligations on termination / nonrenewal | Section 20.4 | Pay outstanding amounts, de- identification of the Barbershop, return of confidential information, covenant not to compete (see also r. below). |
| j. | Assignment of contract by franchisor | Section 18.6 | No restriction on our right to assign. |
| k. | “Transfer” by franchisee – definition | Section 18.1 | Includes transfer of Franchise Agreement or of the Barbershop or its |
| Provision | Section in Development Agreement | Summary Agreement or other agreements, notice of termination of Franchise Agreement delivered to Developer by Franchisor or Developer terminates a Franchise Agreement without cause. | |
| 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. |
| j. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–49)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, if the Development Agreement is terminated, the developer will lose their development rights. Additionally, they must cease using Floyds 99's marks and confidential information, except when operating existing barbershops. The developer is also subject to a covenant not to compete.
This means that upon termination of the Development Agreement, the developer can no longer open new Floyds 99 locations. They are restricted from using Floyds 99's brand name, logos, and other proprietary information, except for the continued operation of any Floyds 99 shops they already own. The non-compete clause further restricts the developer from engaging in any competing business.
The non-compete clause states that the developer cannot operate a competing business for two years within 25 miles of their Floyds 99 shops or any other Floyds 99 shop. This restriction ensures that the terminated developer cannot directly compete with the Floyds 99 franchise system, protecting the brand's market share and goodwill. Prospective developers should carefully consider these implications before entering into a Development Agreement with Floyds 99.