For Floyds 99, what happens to provisions that extend beyond the termination or expiration of the Franchise Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
If for any reason, the Franchisee continues to operate the Barbershop beyond the term of this Agreement or any subsequent renewal period, it shall be deemed to be on a month-to-month basis under the terms of this Agreement and subject to termination upon 30 days' notice or as required by law. If said hold-over period exceeds 90 days, this Agreement is subject to immediate termination unless applicable law requires a longer period. Upon termination after any hold-over period, the Franchisee and those in active concert with the Franchisee, including family members, officers, directors, partners and managing agents, are subject to the terms of Sections 20.3, 20.4, 22.2 and 22.3 of this Agreement and all other applicable post-termination obligations contained in this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, if a franchisee continues to operate the barbershop beyond the agreement's term or any renewal, it's considered a month-to-month basis, terminable with 30 days' notice. Should this hold-over exceed 90 days, the agreement faces immediate termination unless a longer period is legally mandated. Upon termination after any hold-over period, the franchisee is subject to specific post-termination obligations outlined in Sections 20.3, 20.4, 22.2, and 22.3 of the agreement, along with all other applicable post-termination obligations.
Upon termination or expiration of the Franchise Agreement, Floyds 99 has the option to purchase the barbershop or its assets, excluding any value attributed to the franchisor's goodwill. The franchisor must provide written notice of its intent to exercise this option no later than the termination date or 90 days before the expiration of the franchise term. If the parties disagree on the fair market value, an independent third-party appraisal will determine it.
Upon termination or expiration, the franchisee must immediately pay all outstanding royalties, national marketing contributions, fees, and any other amounts owed to Floyds 99 or its affiliates. Additionally, the franchisee must cease using Floyds 99's marks and methods, take necessary actions to cancel or assign any assumed business names or assumed name filings, and discontinue using advertising materials, forms, and other items displaying Floyds 99's marks.
If Floyds 99 does not exercise its right to purchase the franchisee's shop, the franchisee is free to sell the physical assets to a third party, provided all appearances of the Floyds 99 marks, color scheme, and trade dress are removed in a manner approved by Floyds 99. These post-termination obligations are typical in franchising to protect the brand's integrity and ensure a smooth transition.