What happens if the Floyds 99 Developer is in default of the Development Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
be entitled to a refund, return or rebate of any portion of initial franchise fees or Development Fees paid hereunder.
5. DEVELOPMENT OBLIGATIONS
- 5.1 Development Schedule. Acknowledging that time is of the essence, Developer agrees to exercise its development rights according to the development schedule set forth on Exhibit I to this Agreement (the "Development Schedule") and as otherwise set forth herein. Developer must construct, open and maintain in continuous operation a minimum number of FLOYD'S 99 Shops in the Development Area within the time periods mandated by the Development Schedule. Developer's failure to adhere to the Development Schedule (including any extensions approved by Franchisor in writing) will constitute a material breach of this Agreement.
- 5.2 Effect of Failure. Strict compliance with the Development Schedule is of the essence. If Developer fails to construct and open any FLOYD'S 99 Shop or maintain the cumulative number of FLOYD'S 99 Shops open and operating in accordance with the Development Schedule, then Developer will be in default. Any such default constitutes a material
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, a developer is considered in default if they fail to construct and open a Floyds 99 shop or maintain the cumulative number of shops open and operating according to the Development Schedule. Floyds 99 considers strict compliance with the Development Schedule to be essential.
If a developer defaults, Floyds 99 has the option to take several actions. They can terminate the Development Agreement, operate or grant franchises to others within the Development Area, grant the developer up to two extensions of the Development Schedule for six months each (the first extension is free, but the second incurs a non-refundable $5,000 fee), or reduce the Development Area and Schedule to a size Floyds 99 believes the developer can manage.
These stipulations are fairly standard in development agreements. It is important for a prospective Floyds 99 developer to carefully review the Development Schedule, understand the financial implications of failing to meet the schedule, and assess their ability to meet the required milestones. The potential loss of development rights and the ability for Floyds 99 to operate or franchise to others in the area represent significant risks for a developer who fails to meet their obligations.