Does the Floyds 99 non-compete agreement prevent diverting clients to a competitive business?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
e of the Marks hereunder, the Franchisor has also licensed commercially valuable information which comprises and is a part of the Licensed Methods, including without limitation, operations, proprietary products, proprietary product formulas, vendor lists, marketing, advertising and related information and materials and that the value of this information derives not only from the time, effort and money which went into its compilation, but from the usage of the same by all the franchisees of the Franchisor using the Marks and Licensed Methods. 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 t
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 does address the diversion of clients. During the term of the agreement, a franchisee is prohibited from diverting or attempting to divert any business, client, or account from a Floyds 99 shop to a competitive business. This restriction applies not only to the franchisee but also to their officers, directors, shareholders, principal managers, barbershop managers, equity owners, members, managers, partners, and their immediate families. This provision aims to protect Floyds 99's customer base and business relationships from being unfairly taken by a franchisee or related parties during the franchise term.
Specifically, the agreement states that franchisees cannot divert or attempt to divert business or clients of the Floyds 99 shop, the franchisor's business, or any other Floyds 99 franchisee's business. This includes direct inducement or any other means of diverting clients. The non-compete also prevents franchisees from attempting to divert the employment of any employee of the franchisor or another franchisee to a competitive business through direct inducement or other methods.
After the termination or expiration of the franchise agreement, a different set of restrictions applies. For two years following termination or expiration, the franchisee and related parties are prohibited from having any direct or indirect interest in a Competitive Business within a 25-mile radius of the franchised location, any other franchised Floyds 99 shop, or any Floyds 99 shop owned by the franchisor or its affiliates. A "Competitive Business" is defined as any business operating or franchising a retail hair care business deriving more than 5% of its gross sales from haircuts or hair care products, or a wholesale business deriving more than 5% of its gross sales from hair care product sales. However, owning less than 5% of securities in a Competitive Business listed on a stock exchange or traded over-the-counter is permitted.