What happens to development rights if a Floyds 99 Development Agreement is terminated?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
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 will lose their development rights. Additionally, they must cease using Floyds 99's marks and confidential information, except when operating existing barbershops. The franchisee is also subject to a covenant not to compete.
This means that upon termination of the Development Agreement, the franchisee forfeits the right to develop any further Floyds 99 locations within the previously agreed-upon territory. They are only allowed to continue operating any barbershops already established under individual Franchise Agreements. The termination also triggers obligations regarding the use of Floyds 99's brand and proprietary information, restricting their business activities.
The non-compete clause further restricts the franchisee's ability to engage in similar businesses after the Development Agreement is terminated. This prevents them from leveraging their knowledge of the Floyds 99 system to directly compete with the franchise, protecting Floyds 99's market position. The specifics of the non-compete (duration, geographic scope) are detailed elsewhere in the FDD.
Prospective Floyds 99 franchisees should carefully consider the implications of these termination clauses. Understanding the conditions under which the Development Agreement can be terminated and the resulting obligations is crucial for assessing the risks and potential consequences of entering into the franchise agreement.