What is the relationship between officers of Floyds 99 and Holdings and Lefty's?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
purchase some or all of the items or services used in your Barbershop from us or our affiliates upon 30 days' written notice to you.
Other than Lefty's and Elevate, we are not currently affiliated with any designated or approved suppliers. Three of our officers are also officers of Holdings and Lefty's, but none of our officers own an interest in Lefty's, a wholly owned subsidiary of Holdings. Three of our officers own an interest in Holdings, the parent of Lefty's. Three of our officers also own minority interests in Elevate. FFL, on behalf of itself and its affiliates, reserves the right to sell products, equipment, supplies and services to franchisees and to derive revenue from such sales. Lefty's currently manufactures Proprietary Items for sale in the Barbershops and Elevate currently provides information technology services to franchisees. For the fiscal year ending December 31, 2024: (1) Lefty's revenues related to purchases of Proprietary Items by our franchisees was $722,268, or 33% of Lefty's total revenue of $1,956,463, and (2) Elevate's revenues from purchases made by our franchisees was $131,040, or 31% of Elevate's total revenue of $422,811. We estimate that the costs of your purchases from designated or approved sources, or according to our standards and specifications, may range from 50% to 75% of the total
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 24–29)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, there is an overlap in officers between Floyds 99 and Holdings and Lefty's. Three officers of Floyds 99 are also officers of Holdings and Lefty's. However, none of Floyds 99's officers own an interest in Lefty's, which is a wholly-owned subsidiary of Holdings. Three of Floyds 99's officers do own an interest in Holdings, the parent company of Lefty's.
This relationship is important for prospective franchisees to understand because Lefty's manufactures Proprietary Items for sale in Floyds 99 Barbershops. For the fiscal year ending December 31, 2024, Lefty's revenues related to purchases of Proprietary Items by Floyds 99 franchisees was $722,268, which accounted for 33% of Lefty's total revenue of $1,956,463. This indicates that Floyds 99 franchisees contribute a significant portion of Lefty's revenue.
Additionally, Floyds 99 estimates that the costs of purchases from designated or approved sources, or according to their standards and specifications, may range from 50% to 75% of the total cost of establishing a Floyds 99 Shop. After the shop is established, these costs are estimated to be approximately 5% to 15% of the total operating costs. Given the shared officers and the revenue relationship between Floyds 99 and Lefty's, it's crucial for franchisees to understand the potential for conflicts of interest and how these relationships might affect pricing, supply, and overall business operations. Franchisees should seek clarification on how Floyds 99 ensures fair practices and competitive pricing in light of these affiliations.