What is the impact of a flood on the operation of a Floyds 99 shop regarding termination?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 20.1 Termination by Franchisor Effective Upon Notice. The Franchisor shall have the right, at its option, to terminate this Agreement and all rights granted the Franchisee hereunder, without affording the Franchisee any opportunity to cure any default (subject to any state laws to the contrary, where state law shall prevail), effective upon written notice to the Franchisee, addressed as provided in Section 24.12 upon the occurrence of any of the following events:
- a. Abandonment. If the Franchisee ceases to operate the FLOYD'S 99 Shop or otherwise abandons the FLOYD'S 99 Shop for a period of three consecutive days, or any shorter period that indicates an intent by the Franchisee to discontinue operation of the FLOYD'S 99 Shop, unless and only to the extent that full operation of the FLOYD'S 99 Shop is suspended or terminated due to fire, flood, earthquake or other similar causes beyond the Franchisee's control and not related to the availability of funds to the Franchisee;
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, a flood can impact the operation of a Floyds 99 shop regarding termination. Specifically, if a franchisee ceases to operate their shop for three consecutive days, or any shorter period indicating an intent to discontinue operation, Floyds 99 has the right to terminate the franchise agreement. However, this termination clause does not apply if the shop's full operation is suspended or terminated due to a flood or other similar causes beyond the franchisee's control, provided that the cause is not related to the availability of funds to the franchisee.
This provision protects franchisees from termination if they are forced to temporarily close their Floyds 99 shop due to events like a flood. However, the exception explicitly excludes situations where the closure is due to a lack of funds, even if indirectly related to the flood. This means that if a franchisee's shop is flooded, but the underlying reason they cannot reopen is a lack of insurance or capital, Floyds 99 may still have grounds for termination.
It is important for prospective franchisees to understand the conditions under which Floyds 99 can terminate the franchise agreement and the exceptions that protect them in certain circumstances. Franchisees should ensure they have adequate insurance coverage and contingency plans to address potential disruptions caused by events like floods to avoid any potential disputes with Floyds 99 regarding termination.