What happens if a Floyds 99 developer fails to meet the Development Schedule?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
a "Development Fee" of $49,500 for each of the first and second FLOYD'S 99 Shops to be developed hereunder, plus $34,500 for each of the remaining Barbershops to be developed. Developer agrees that Franchisor has fully earned the Development Fee upon receipt and acknowledges that the Development Fee represents payment for the grant of the development rights, administrative and other expenses and for development opportunities lost or deferred as a result of the Development Area granted to Developer under this Agreement. All fees hereunder are nonrefundable once paid to Franchisor and under no circumstances will Developer 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 Floyds 99's 2025 Franchise Disclosure Document, a developer's failure to adhere to the Development Schedule constitutes a material breach of the Development Agreement. Strict compliance with the Development Schedule is considered essential. The Development Schedule outlines the minimum number of Floyds 99 shops the developer must construct, open, and maintain in continuous operation within specified time periods in the Development Area.
If a developer fails to meet the milestones outlined in the Development Schedule, Floyds 99 has several options. The franchisor may terminate the Development Agreement, allowing them to end the relationship entirely. Alternatively, Floyds 99 can choose to operate or grant franchises to others within the developer's designated area.
Floyds 99 may also grant the developer up to two extensions of the Development Schedule, each lasting six months, upon the developer's request. The first extension is provided at no charge, but the second extension requires the developer to pay a non-refundable $5,000 extension fee. Another option available to Floyds 99 is to reduce the Development Area and the Development Schedule to a size and magnitude that the franchisor believes the developer can realistically manage while still adhering to the agreement.
These potential consequences highlight the importance of carefully assessing one's capabilities and resources before entering into a Development Agreement with Floyds 99. Prospective developers should thoroughly review the Development Schedule and ensure they can meet the required milestones. It is also important to understand Floyds 99's extension policy, as it may change and could involve additional fees.