Does the Floyds 99 non-compete agreement apply to the franchisee's partners?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, other than the FLOYD'S 99 Shop licensed herein or authorized by separate agreement with the Franchisor, neither the Franchisee nor any of the Franchisee's officers, directors, shareholders, Principal Managers, Barbershop managers, equity owners, members, managers or partners, nor any member of his or their immediate families, shall during the term of this Agreement:
a. have any direct or indirect controlling interest as a disclosed or beneficial owner in a "Competitive Business" as defined below;
b. perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business; or
c. divert or attempt to divert any business related to, or any client or account of the FLOYD'S 99 Shop, the Franchisor's business or any other FLOYD'S 99 franchisee's business, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of the Franchisor or another franchisee licensed by the Franchisor to use the Marks and Licensed Methods, to any Competitive Business by any direct inducement or otherwise.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the non-compete agreement extends beyond just the franchisee. Specifically, it applies to the franchisee's officers, directors, shareholders, Principal Managers, Barbershop managers, equity owners, members, managers, and partners, as well as members of their immediate families. This means that all these individuals are restricted from engaging in competitive business activities during the term of the Franchise Agreement, as defined within the agreement.
The restrictions prevent these individuals from having a direct or indirect controlling interest in a Competitive Business, performing services for a Competitive Business as a director, officer, manager, employee, consultant, representative, or agent, or diverting business or employees from the Floyds 99 shop or other franchisees to a Competitive Business. This broad scope is designed to protect Floyds 99's confidential information, licensed methods, and overall market position by preventing those closely associated with the franchisee from using their knowledge or influence to benefit a competing business.
For a prospective Floyds 99 franchisee, this has significant implications. It's crucial to understand that the non-compete obligations extend to a wide range of affiliated individuals, not just the franchisee themselves. Franchisees need to ensure that all relevant parties are aware of and willing to comply with these restrictions before entering into the agreement. This could impact the franchisee's choice of business partners, managers, and even family members involved in the business. The definition of "Competitive Business" is important and should be carefully reviewed to understand the full scope of these limitations.