What is the landlord's obligation to Floyds 99 regarding franchisee defaults?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
itten approval before executing any lease, including all lease amendments, for the Franchised Location. If the Franchisee is purchasing real property for the Franchised Location, the Franchisee shall obtain the Franchisor's prior written approval of the purchase agreement before it is signed. 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. The Franchisor reserves the right to require the Franchisee to use the Franchisor's standard form of lease instead of adding the required provisions to the landlord's form of lease, in the Franchisor's sole discretion.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the landlord has specific obligations to Floyds 99 in the event of a franchisee default. The lease for the franchised location must include a provision requiring the landlord to provide Floyds 99 with written notice of any franchisee defaults under the lease. Additionally, the landlord must grant Floyds 99 the right to cure any such defaults.
These stipulations are put in place to protect Floyds 99's interests and ensure the continuity of the franchise system. By receiving notice of a franchisee's default, Floyds 99 has the opportunity to intervene and rectify the situation, potentially preventing termination of the lease and disruption of the business. The right to cure defaults gives Floyds 99 further control, allowing them to address the issues directly and maintain the operation of the Floyds 99 shop.
Furthermore, the lease should allow Floyds 99 the option to assume the lease if the franchisee defaults or if the Franchise Agreement terminates or expires. Following such assumption, Floyds 99 has the right to assign the lease or sublet the premises to another Floyds 99 franchisee without needing further consent from the landlord. This ensures that Floyds 99 can maintain a presence in the location, even if the original franchisee is no longer operating the business. The lease shall be conditionally assigned to Floyds 99 as security for the Franchisee's timely performance of all obligations under this Agreement and the lease.
These requirements are typically included in a Lease Addendum. The franchisee must obtain the landlord's consent to the terms of Floyds 99's standard form of Lease Addendum or incorporate Floyds 99's required terms into the lease or obtain the landlord's consent to the terms of Floyds 99's standard form of lease, whichever is applicable.