What obligation does the Developer have regarding the terms and conditions of the Franchise Agreement for their first Floyds 99 Barbershop?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.3 Franchise Agreement First Barbershop Developed. The parties acknowledge that the Franchise Agreement, attached hereto as Exhibit IV and by this reference incorporated herein, governing the operation of Developer's first Barbershop to be opened hereunder, is being executed concurrently with this Agreement. Developer agrees to comply with the terms and conditions of the Franchise Agreement as a part of its obligations hereunder and acknowledges that failure to execute and comply with such Franchise Agreement is a breach of this Agreement.
- 2.4 Subsequent Franchise Agreements. The parties agree that a separate Franchise Agreement shall be executed by the parties to this Agreement for each FLOYD'S 99 Shop developed under this Agreement. The Franchise Agreement for the second and subsequent Barbershops will be executed within 10 days after Franchisor's approval of a location for each such Barbershop. Developer's failure to execute any additional Franchise Agreements or its default in any term of such Franchise Agreements may, at the option of Franchisor, be deemed a default under this Agreement and shall entitle Franchisor to terminate this Agreement as further provided in Article 4 below. Each Franchise Agreement to be executed by Developer for each Barbershop to be developed hereunder shall be in a form substantially similar to the Franchise Agreement being executed herewith, although Franchisor reserves the right to change provisions of the Franchise Agreement to conform with the then current Franchise Agreement being offered to new franchisees of Franchisor. Notwithstanding the foregoing, Franchisor agrees that it will not charge an initial franchise fee to Developer that is greater than the amounts set forth herein and will not increase the Royalty percentage to a rate that is greater than the rate charged to Developer in the Franchise Agreement being executed herewith. Developer acknowledges that Franchisor has the right, however, to charge then current published rates for advertising contributions and optional products and services offered to Developer in accordance with Franchisor's then current franchise disclosure document. The form of the Franchise Agreement attached as Exhibit IV and any future forms of Franchise Agreements referred to in this Section will also be included in the term "Franchise Agreement" as used in this Agreement.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, a developer must comply with the terms and conditions outlined in the Franchise Agreement for their first barbershop. The Franchise Agreement, which is included as Exhibit IV in the Development Agreement, is executed concurrently with the Development Agreement.
A key obligation for the developer is to adhere to the Franchise Agreement. Failure to execute and comply with this agreement constitutes a breach of the Development Agreement. This highlights the importance of understanding and fulfilling all requirements specified in the Franchise Agreement from the outset.
For subsequent Floyds 99 Barbershops, a separate Franchise Agreement is required for each location. These agreements must be executed within 10 days of Floyds 99's approval of the site. Failure to execute these additional agreements or any default in their terms can be considered a default under the Development Agreement, potentially leading to termination of the agreement at Floyds 99's discretion. While subsequent Franchise Agreements will be substantially similar to the initial one, Floyds 99 retains the right to modify provisions to align with their current standard franchise offering. However, Floyds 99 assures that the initial franchise fee and royalty percentage will not exceed those in the initial Franchise Agreement.