May Floyds 99 require franchisees to sign an addendum to their Franchise Agreement as a condition of participating in a Card Program?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to require you to participate in, and to purchase and utilize processing equipment and software designated by us to implement a prepaid card, gift card, rewards card or customer loyalty program (each, a "Card Program"). As of the date of this Disclosure Document, we have implemented a gift card program that you must participate in. The fees which are currently associated with the operation of the Card Program are paid by the National Marketing Fund. You must follow the guidelines set forth in the Operations Manual with respect to your obligations and responsibilities under a Card Program, the methods of operation for a Card Program, the transaction information you are required to provide to us and the retention of complete and accurate books and records regarding transactions made pursuant to a Card Program. To comply with applicable state laws and regulations, the funds you receive in connection with the sale, activation and reloading of prepaid cards, gift cards, rewards cards or similar promotional cards, and the subsequent transactions which are made by the holders of such cards will be accounted for separately from other sales made at your Barbershop. We reserve the right to collect the funds you receive in connection with the sale and activation and reloading of prepaid cards, gift cards, rewards cards or similar promotional cards for reconciliation of the cardholder revenue and debited cardholder sales. You are responsible for compliance with all federal and state laws that may regulate gift and stored value cards, including any unclaimed property and cash refund laws in your state. We may charge you transaction fees to activate, reload, redeem and otherwise administer a Card Program. You may be required to sign an addendum to your Franchise Agreement as a condition of participation in a Card Program. Additionally, we have the right to audit your books, records and processes relating to a Card Program. You may be required to pay the costs of an audit if the audit reflects an underpayment of more than 5% during the period reviewed.
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, franchisees may be required to sign an addendum to their Franchise Agreement as a condition of participating in a Card Program. Floyds 99 reserves the right to require franchisees to participate in prepaid card, gift card, rewards card, or customer loyalty programs, referred to as "Card Programs."
Floyds 99 has already implemented a gift card program that franchisees must participate in. Franchisees are obligated to follow the guidelines in the Operations Manual regarding their responsibilities under the Card Program, including operational methods, transaction information, and record-keeping. Funds received from the sale, activation, and reloading of these cards must be accounted for separately from other sales. Floyds 99 retains the right to collect these funds for reconciliation purposes.
Franchisees are responsible for complying with all federal and state laws regulating gift and stored value cards, including unclaimed property and cash refund laws. Floyds 99 may charge transaction fees for administering the Card Program. Additionally, Floyds 99 has the right to audit a franchisee's books, records, and processes related to the Card Program, with the franchisee potentially liable for audit costs if an underpayment of more than 5% is discovered during the review period.