What happens if a Floyds 99 developer terminates a Franchise Agreement without cause?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 | | | 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 a developer terminates a Franchise Agreement without cause, this is considered a non-curable default under the Development Agreement.
Specifically, the consequences for such termination include the loss of development rights. Additionally, the developer must cease the use of Floyds 99's Marks and confidential information, except when related to currently operating Barbershops.
Furthermore, the developer is subject to a covenant not to compete. This means the developer may face restrictions on engaging in similar businesses after the termination, as further detailed in the Development Agreement.