What happens if a Floyds 99 developer makes an unapproved transfer?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term (Development Agreement) | Section 3.1 | Varies based on development schedule. |
| b. | Renewal or extension of the term | Not Applicable | Not Applicable |
| c. | Requirements for franchisee to renew or extend | Not Applicable | Not Applicable |
| d. | Termination by franchisee | Not Applicable | Not Applicable |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with cause | Section 9.1 | We can terminate if you default on the Development Agreement or any of your Franchise Agreements. |
| g. | "Cause" defined – curable defaults | Section 9.2 | 30 days' notice of breach of Development Agreement or Franchise Agreement. |
| h. | "Cause" defined – non-curable defaults | Section 9.1 | Material misrepresentation, failure to meet development schedule, conviction of a crime, failure to pay amounts due to Franchisor, unapproved transfers, misuse of Marks, death or disability of Developer, unauthorized disclosure, noncompliance with restrictive covenants, terrorist activities, bankruptcy, assignment for benefit of creditors, default under Franchise |
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 a developer engages in an unapproved transfer, it constitutes a cause for termination of the Development Agreement. Specifically, under Section 9.1, Floyds 99 has the right to terminate the agreement if the developer defaults, which includes unapproved transfers.
An unapproved transfer is classified as a non-curable default. This means that Floyds 99 does not need to provide the developer with an opportunity to correct the breach before terminating the agreement. This is a significant risk for developers, as any transfer of interest in the Development Agreement or the franchisee entity without prior approval from Floyds 99 can immediately jeopardize their development rights.
It is important for prospective Floyds 99 developers to understand the implications of this clause. They should ensure they are fully aware of the procedures and conditions for obtaining franchisor approval before considering any transfer of their interest in the Development Agreement or franchisee entity. Failure to do so could result in the termination of their agreement and loss of development rights.