What is the relationship between the development fee for a Floyds 99 Development Agreement (Item 5) and the site selection obligations outlined in Item 9?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
BANKRUPTCY**
No bankruptcy is required to be disclosed in this Item.
ITEM 5. INITIAL FEES
Development Agreement
Qualified applicants will have the right to purchase franchise rights to develop and open multiple Barbershops by signing a Development Agreement together with the Franchise Agreement for the first FLOYD'S 99 Shop to be developed. When you sign the Development Agreement and first Franchise Agreement, you must pay us a development fee which will vary based on the number of Barbershops you commit to develop. The development fees for Barbershops under a Development Agreement are: (a) $49,500 for each of the first and second Barbershops, and (b) $34,500 for the third and each subsequent Barbershop. The development fee is fully earned by us on receipt for the grant of a geographic territory reserved for your development of Barbershops and is non-refundable.
Franchise Agreement
Although we do not typically grant franchise rights to own and operate a single FLOYD'S 99 Shop, if you are granted the right to own and operate a single Barbershop a non-refundable initial franchise fee of $49,500 is payable to us in full when you sign your Franchise Agreement.
VetFran Program
We proudly participate in the International Franchise Association's Veterans Transition Franchise Initiative, otherwise known as "VetFran." If you are a new franchisee and one of your owners is a veteran who was honorably discharged from the United States Armed Forces or is on active duty on the date you sign your Franchise Agreement, we reduce the initial franchise fee for your first new franchise if that individual owns at least 10% of the franchisee. The reduced fee will be $37,125, which is a $12,375 or 25% discount. A discount will not be given for franchises which are developed under a Development Agreement.
All of the initial fees described in this Item 5 are the same for all FLOYD'S 99 Barbershops unless otherwise specified.
**ITEM 6.
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, Item 5 outlines the initial fees, including the development fee for a Development Agreement, while Item 9 details the franchisee's obligations, including site selection. The development fee, ranging from $49,500 for each of the first and second Barbershops to $34,500 for the third and subsequent Barbershops, grants the developer the right to develop multiple Floyds 99 shops within a specific territory. This fee is earned upon receipt by Floyds 99 and is non-refundable.
Item 9 specifies that site selection and acquisition/lease are franchisee obligations, referencing Section 5.3 of the Development Agreement. This section likely outlines the process and requirements for selecting and securing locations for the Floyds 99 shops. While the development fee grants the right to develop in a territory, franchisees still bear the responsibility for finding suitable sites that meet Floyds 99's criteria. Floyds 99 does offer assistance with site selection, including providing criteria for satisfactory locations.
Therefore, the relationship between the development fee and site selection is that the fee provides the right to develop Floyds 99 shops, while the franchisee has the obligation to find and secure suitable locations, with some assistance from Floyds 99. The franchisee cannot begin development until a site is approved, making site selection a critical step after paying the development fee. Floyds 99 also provides design plans and specifications for the site.