Does the landlord have to notify Floyds 99 of any defaults by the Franchisee under the lease?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The lease for the Franchised Location shall contain provisions set forth in detail in the Operations Manual (defined in Section 8.1 below), which may include the following: (1) providing for an initial term, or an initial term together with any renewal terms (for which rent must be specified in the lease) of at least 10 years; (2) expressing the landlord's consent to the Franchisee's use of the Marks and all required signage for the Barbershop; (3) giving the Franchisor the right to enter the premises and make any modification necessary to protect the Marks and the Licensed Methods; (4) allowing the Franchisor, or its designee, to have the option to assume the lease and the right following such assumption to assign the lease or sublet the leased premises to another FLOYD'S 99 franchisee for all or any part of the lease term without further landlord consent if the Franchisee defaults under the lease or this Agreement or if this Agreement terminates or expires; (5) requiring the landlord to give the Franchisor written notice of any defaults by the Franchisee under such lease and the right to cure any such defaults; and (6) the lease shall also contain restrictive use clauses which are acceptable to the Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the lease for the franchised location should include a provision requiring the landlord to provide Floyds 99 with written notification of any defaults by the franchisee under the lease. The lease should also grant Floyds 99 the right to cure any such defaults. This requirement is part of the detailed provisions outlined in the Operations Manual that franchisees must adhere to when securing a lease.
This stipulation is designed to protect Floyds 99's interests and ensure the continuity of the franchise operation. By receiving notice of any defaults, Floyds 99 has the opportunity to intervene and rectify the situation, potentially preventing lease termination and maintaining the presence of the Floyds 99 brand at that location. This is a fairly common practice in franchising, as franchisors want to protect their brand and ensure franchisees are meeting their obligations.
Furthermore, Floyds 99 requires franchisees to obtain prior written approval before executing any lease for the franchised location. This approval process allows Floyds 99 to ensure that the lease contains all the necessary provisions, including the notification of default clause, and that the terms are favorable to both the franchisee and the franchisor. Floyds 99 also reserves the right to require the franchisee to use the franchisor's standard form of lease, which would already include these protections.
In addition to the notification requirement, the lease shall be conditionally assigned to Floyds 99 as security for the franchisee's timely performance of all obligations under the Franchise Agreement and the lease. The franchisee must also obtain the landlord's consent to the terms of Floyds 99's standard Lease Addendum or incorporate Floyds 99's required terms into the lease. These measures provide Floyds 99 with additional security and control over the leased premises, further safeguarding its interests in the event of franchisee default.