Does the Floyds 99 non-compete agreement prevent a franchisee from diverting employees 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 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.
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 employees. During the term of the Franchise Agreement, a franchisee is prohibited from diverting or attempting 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.
This restriction means that while operating a Floyds 99 franchise, franchisees cannot actively try to recruit or hire employees of Floyds 99, other Floyds 99 franchisees, or their affiliates to work for a competing business. The term "Competitive Business" is defined as any business operating or granting franchises or licenses to others to operate, either (i) a retail hair care business deriving more than 5% of its gross sales from the sale of haircuts or hair care products; or (ii) a wholesale business deriving more than 5% of its gross sales from the sale of hair care products.
This clause protects Floyds 99's network by preventing franchisees from poaching talent and potentially using the knowledge and skills gained at Floyds 99 to benefit a competitor. It also helps maintain the stability of the workforce within the Floyds 99 system. Franchisees should be aware of this restriction and ensure their hiring practices do not violate this agreement during the term of their franchise agreement.