Does Floyds 99 require approval for a transfer of interest in the Development Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 19.1 | 10 years |
| b. | Renewal or extension of the | Sections 19.3 and | Term in then-current Franchise |
| term | 19.4 | Agreement. | |
| c. | Requirements for franchisee to renew or extend | Section 19.3 | Remodel, pay fee, sign new agreement and release. You may be asked to sign a contract with materially different terms and conditions than your original contract if you choose to renew. |
| d. | Termination by franchisee | Not Applicable | Not Applicable |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with | Sections 20.1 and | We can terminate only if you commit |
| cause | 20.2 | any one of several listed violations. | |
| g. | “Cause” defined – curable | Sections 20.1 and | 30 days for operational defaults, 10 |
| defaults | 20.2 | days for monetary defaults. | |
| h. | “Cause” defined – non-curable defaults | Section 20.1 | Unauthorized disclosure, conviction of a crime, abandonment, unapproved transfers, bankruptcy, assignment for benefit of creditors, unsatisfied judgments, levy, foreclosure, repeated violations, misuse of Marks. |
| i. | Franchisee’s obligations on termination / nonrenewal | Section 20.4 | Pay outstanding amounts, de- identification of the Barbershop, return of confidential information, covenant not to compete (see also r. below). |
| j. | Assignment of contract by franchisor | Section 18.6 | No restriction on our right to assign. |
| k. | “Transfer” by franchisee – definition | Section 18.1 | Includes transfer of Franchise Agreement or of the Barbershop or its |
| Provision | Section in Development Agreement | Summary Agreement or other agreements, notice of termination of Franchise Agreement delivered to Developer by Franchisor or Developer terminates a Franchise Agreement without cause. | |
| i. | Franchisee’s obligations on termination / nonrenewal | Section 9.3 | Loss of development rights, cease use of Marks and confidential information except in connection with Barbershops currently operating; covenant not to compete. |
| j. | Assignment of contract by franchisor | Section 8.6 | No restriction on our right to assign. |
| k. | “Transfer” by franchisee – definition | Sections 8.1 and 8.5 | Includes transfer of interest in Development Agreement, or in the franchisee entity. |
| l. | Franchisor’s approval of transfer by franchisee | Section 8.3 | We or our designee have the right to approve all transfers. |
| m. | Conditions for franchisor approval of transfer | Sections 8.2 and 8.3 | Notice, transferee qualifies, all amounts due are paid in full, payment of transfer fee, then current co |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–49)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, Floyds 99 requires approval for any transfer of interest in the Development Agreement. The FDD states that Floyds 99, or its designee, has the right to approve all transfers. This requirement is detailed within Section 8.3 of the Development Agreement.
This means that if a franchisee wishes to transfer their rights or obligations under the Development Agreement to another party, they must first obtain approval from Floyds 99. This provision allows Floyds 99 to maintain control over who becomes a developer within their franchise system, ensuring that new developers meet their standards and are capable of fulfilling the obligations of the agreement.
Furthermore, the FDD outlines specific conditions for obtaining Floyds 99's approval for a transfer. These conditions include providing notice to Floyds 99, ensuring the transferee meets Floyds 99's qualifications, paying all outstanding amounts due to Floyds 99, paying a transfer fee, signing the then-current contract, and signing a general release and non-competition covenant. These conditions are found in Sections 8.2 and 8.3 of the Development Agreement.
In addition to requiring approval, Floyds 99 also retains the right of first refusal to acquire the franchisee's business, as detailed in Section 8.4 of the Development Agreement. This means that before a franchisee can transfer their interest to a third party, Floyds 99 has the option to match any offer made by that third party and acquire the business themselves. This provision gives Floyds 99 further control over the transfer process and the opportunity to maintain ownership within the franchise system.