If a Floyds 99 developer is convicted of a crime, is that a curable or non-curable default?
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 Floyds 99's 2025 Franchise Disclosure Document, a developer's conviction of a crime constitutes a non-curable default under the Development Agreement. This means that Floyds 99 has the right to terminate the Development Agreement immediately if a developer is convicted of a crime, without providing an opportunity to remedy the situation.
This provision is significant for prospective Floyds 99 developers because it highlights the importance of maintaining a clean criminal record. Any criminal conviction, regardless of the nature of the crime, could lead to the termination of the Development Agreement and the loss of development rights. This could have substantial financial implications for the developer, who may have already invested time and resources into the franchise.
In the franchise industry, it is common for franchisors to include provisions that allow for termination in the event of a franchisee's criminal conviction. This is because a franchisee's reputation and integrity are closely tied to the brand's image. However, the specific types of crimes that trigger termination and whether the default is curable or non-curable can vary from franchise to franchise. Therefore, it is crucial for prospective franchisees to carefully review the termination provisions in the Franchise Disclosure Document and Development Agreement before investing in a franchise.
It is important to note that the Floyds 99 Franchise Agreement also lists "conviction of a crime" as a non-curable default. Therefore, if a franchisee is convicted of a crime, Floyds 99 can terminate the Franchise Agreement as well.