Does Floyds 99 have a right of first refusal to acquire a developer's business?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
| 1. | 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 contract signed, franchisee signs general release and noncompetition covenant. |
| n. | Franchisor's right of first refusal to acquire franchisee's business | Section 8.4 | We can match any offer. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–49)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, Floyds 99 does possess a right of first refusal to acquire a developer's business. This is explicitly stated in Item 17, which outlines the terms related to the transfer of the Development Agreement.
Specifically, Section 8.4 of the Development Agreement grants Floyds 99 the ability to match any offer made to a developer who wishes to transfer their business. This means that if a developer receives an offer from a third party to purchase their Floyds 99 development rights or business, the developer must first present that offer to Floyds 99. Floyds 99 then has the option to acquire the developer's business by matching the terms of the third-party offer.
This right of first refusal provides Floyds 99 with significant control over who becomes a developer within their franchise system. It allows Floyds 99 to prevent unwanted or unqualified individuals or entities from acquiring development rights, ensuring that new developers meet their standards and align with their strategic goals. For a prospective franchisee, this means that selling their business may require an extra step of offering it to Floyds 99 first, potentially delaying or complicating the sale process.