What happens if either party defaults on the Floyds 99 agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
9. DEFAULT AND TERMINATION
9.1 Termination by Franchisor Effective Upon Notice. Franchisor shall have the right, at its option, to terminate this Agreement and all rights granted Developer hereunder, without affording Developer any opportunity to cure any default (subject to any state laws to the contrary, where state law shall prevail), effective upon written notice to Developer, addressed as provided in Section 13.11, upon the occurrence of any of the following events:
(a) Developer (or any of Developer's owners) have made any material misrepresentation or omission in connection with Developer's purchase of these development rights;
(b) Developer fails to establish and open Barbershops in accordance with the Development Schedule (or any extension approved by Franchisor in writing);
(c) Developer fails to maintain in continuous operation the minimum number of cumulative Barbershops required by the Development Schedule;
(d) If Developer is convicted of a felony, a crime involving moral turpitude, or any crime or offense that is reasonably likely, in the sole opinion of Franchisor, to materially and unfavorably affect the Licensed Methods, Marks, goodwill or reputation thereof;
(e) Developer fails to pay when due any amount owed to Franchisor or its affiliates, under this Agreement or any other agreement, and does not correct such failure within 10 days after written notice of such failure is delivered to Developer;
(f) Developer surrenders or transfers control of this Agreement or the business without F
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, several consequences can arise if the developer (franchisee) defaults on the Development Agreement. Floyds 99 has the right to terminate the agreement if the developer makes any material misrepresentation or omission when purchasing the development rights, fails to open barbershops based on the agreed-upon Development Schedule, or fails to maintain the minimum number of barbershops required by the Development Schedule. Additionally, Floyds 99 can terminate the agreement if the developer is convicted of a felony or any crime that could unfavorably affect Floyds 99's reputation, or if the developer fails to pay amounts owed to Floyds 99 or its affiliates within 10 days of written notice.
If the developer defaults, Floyds 99 can terminate the agreement without providing an opportunity to cure the default, unless state laws dictate otherwise. Floyds 99 can also choose to operate or franchise others to operate Floyds 99 shops within the Development Area. Alternatively, Floyds 99 may grant up to two six-month extensions of the Development Schedule, with the first extension being free and the second costing a non-refundable $5,000 extension fee. Floyds 99 also has the option to reduce the Development Area and Schedule to a size that the developer can manage.
In the event of termination or expiration of the Development Agreement, the developer's rights to develop additional Floyds 99 shops are terminated, and they must cease using Floyds 99's trademarks and confidential information, except for existing barbershops operating under a Franchise Agreement. The developer must also adhere to any restrictive covenants outlined in the agreement. Obligations that survive the termination of the agreement remain in effect until fulfilled. It is important to note that if any terms regarding termination or expiration are inconsistent with state or federal law, those laws will govern the developer's rights.