What right does the Floyds 99 franchisor have if a franchisee does not pay their insurance premiums?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| phone lines used in your FLOYD'S 99 Shop. We collect and deliver the amounts charged to the third-party vendor. We do not retain any of the funds you pay for the wired and wireless phone lines used in your Shop. | |||
| Recruiting Platform5 | $1,000 - $1,500 per year if you elect to use texting as an option | As incurred | We make ICIMS (a recruiting software platform) available to you as a tool. There is currently no cost to use ICIMS unless you elect to use texting as an option. If you electing to use texting, ICIMS bills us or our affiliates for this option and we then invoice you for the ICIMS charge. |
| Costs and Attorneys' Fees1 | Will vary depending on nature of your default | As incurred | Payable upon your failure to comply with the Franchise Agreement. |
| Indemnification Under Franchise Agreement1 | Will vary depending on nature of the claim against us | As incurred | You have to reimburse us if we are held liable for claims resulting from your operation of your Barbershop. |
| Insurance Premiums1 | Will vary depending on your location and insurer | As incurred | You must carry insurance and pay the premiums required by your insurer. If you do not pay your premiums, we have the right (but not the obligation) to pay them for you. You must reimburse us for any insurance premiums that we pay on your behalf. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, if a franchisee fails to pay their required insurance premiums, the franchisor has the right, but not the obligation, to pay the premiums on behalf of the franchisee. The franchisee is then required to reimburse Floyds 99 for any insurance premiums that Floyds 99 pays on their behalf. The amount of the insurance premiums will vary depending on the franchisee's location and insurer.
This is a fairly standard clause in franchise agreements. It protects both the franchisor and franchisee by ensuring that the business maintains adequate insurance coverage. If a franchisee's insurance lapses, it could expose both the franchisee and Floyds 99 to significant financial risk in the event of an accident or other covered loss.
For a prospective Floyds 99 franchisee, this means it is crucial to budget for insurance costs and ensure timely payments. Failure to do so could result in Floyds 99 stepping in to pay the premiums and then demanding reimbursement, potentially creating a financial strain on the franchisee's business. Franchisees should discuss insurance requirements and options with the franchisor during their due diligence process.