How does Floyds 99 recognize initial franchise fees?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
and by this reference
incorporated herein, is true, complete, accurate and not misleading, and, in accordance with the information contained in the Statement of Ownership, the controlling ownership of the FLOYD'S 99 developer business is held by Developer. Developer shall promptly provide Franchisor with a written notification if the information contained in the Statement of Ownership changes at any time during the term of this Agreement and shall comply with the applicable transfer provisions contained in Article 8 herein and in the Franchise Agreement. In addition, if Developer is an entity, all of the owners of Developer shall sign the Guaranty and Assumption of Developer's Obligations attached hereto as Exhibit II.
4. INITIAL FRANCHISE AND DEVELOPMENT FEES
4.1 Fees. Concurrently with the execution of this Agreement, Franchisor acknowledges that in consideration of the development rights granted herein, Developer has paid a "Development Fee" of $49,500 for each of the first and second FLOYD'S 99 Shops to be developed hereunder, plus $34,500 for each of the remaining Barbershops to be developed.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 FDD, the franchisor acknowledges that the developer has paid a "Development Fee" of $49,500 for each of the first and second Floyd's 99 Shops to be developed, plus $34,500 for each of the remaining Barbershops to be developed. Floyds 99 recognizes the Development Fee as fully earned upon receipt. This fee compensates Floyds 99 for granting development rights, covering administrative expenses, and accounting for development opportunities lost or deferred due to the Development Area granted to the developer.
It's important to note that all fees paid to Floyds 99 are nonrefundable. Under no circumstances will the developer be entitled to a refund, return, or rebate of any portion of initial franchise fees or Development Fees paid.
However, there is an addendum to the Floyds 99 Franchise Disclosure Document for the state of Illinois. Payment of the development fee and initial franchise fee is deferred until such time as Floyds 99 completes its initial obligations and the franchisee is open for business. The deferral of the development fee and initial franchise fee is required by the Illinois Attorney General's Office based on their financial statements.