Must the rent for any renewal terms be specified in the lease for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The lease for the Franchised Location shall contain provisions set forth in detail in the Operations Manual (defined in Section 8.1 below), which may include the following: (1) providing for an initial term, or an initial term together with any renewal terms (for which rent must be specified in the lease) of at least 10 years; (2) expressing the landlord's consent to the Franchisee's use of the Marks and all required signage for the Barbershop; (3) giving the Franchisor the right to enter the premises and make any modification necessary to protect the Marks and the Licensed Methods; (4) allowing the Franchisor, or its designee, to have the option to assume the lease and the right following such assumption to assign the lease or sublet the leased premises to another FLOYD'S 99 franchisee for all or any part of the lease term without further landlord consent if the Franchisee defaults under the lease or this Agreement or if this Agreement terminates or expires; (5) requiring the landlord to give the Franchisor written notice of any defaults by the Franchisee under such lease and the right to cure any such defaults; and (6) the lease shall also contain restrictive use clauses which are acceptable to the Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the lease for the franchised location must include specific provisions detailed in the Operations Manual. One of these provisions requires that if the lease includes renewal terms, the rent for those renewal terms must be specified in the lease agreement. This ensures that both the franchisee and the franchisor have a clear understanding of the financial obligations associated with the location over the entire potential term of the lease.
This requirement is significant for prospective Floyds 99 franchisees because it necessitates careful negotiation of lease terms upfront. Franchisees need to consider potential rent increases during renewal periods and factor those costs into their financial projections. Failure to secure predictable rent terms could lead to financial strain if renewal rents are unexpectedly high.
Floyds 99 also requires franchisees to obtain the franchisor's prior written approval before executing any lease, including all lease amendments. This approval process allows Floyds 99 to ensure that the lease contains all the necessary provisions, including the specification of rent for renewal terms, and that the lease terms are generally favorable to the franchisee and align with the franchisor's standards. The franchisor also reserves the right to require the franchisee to use the Franchisor's standard form of lease instead of adding the required provisions to the landlord's form of lease, in the Franchisor's sole discretion.
In summary, specifying rent for renewal terms in the lease is a mandatory requirement for Floyds 99 franchisees. This requirement, coupled with the franchisor's approval process, aims to protect the interests of both the franchisee and the franchisor by ensuring financial predictability and compliance with Floyds 99's operational standards.