What happens to the Franchise Agreements if the license between FFL and Holdings is terminated for Floyds 99?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The Marks were licensed to FFL by Holdings in March 2005. Through a license with Holdings, we have full right and authority to use and license to franchisees the use of the Marks for 10-year terms that automatically renew. This license can be terminated only on mutual agreement of the parties or following a notice of default and a cure period. In the event of a termination, FFL's rights and obligations under all Franchise Agreements are deemed to be assigned to Holdings to provide continuity to franchisees.
Source: Item 13 — TRADEMARKS (FDD pages 41–43)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the Franchise Agreements will be assigned to Holdings in the event of a termination of the license between FFL and Holdings.
Specifically, the FDD states that FFL licenses the trademarks from Holdings. This license grants FFL the right to use and license the Marks to franchisees for 10-year terms that automatically renew. The license between FFL and Holdings can be terminated only if both parties agree, or if there is a default and a cure period is not met.
Should the license between FFL and Holdings be terminated, FFL's rights and obligations under all Franchise Agreements are automatically assigned to Holdings. This assignment is intended to maintain continuity for the franchisees, ensuring they can continue operating under the Floyds 99 brand without disruption. This is a fairly common clause in franchise agreements, designed to protect franchisees in the event of unforeseen issues between the franchisor and a related entity.