Are the rights granted to the Floyds 99 developer in the agreement exclusive?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
rge an initial franchise fee to Developer that is greater than the amounts set forth herein and will not increase the Royalty percentage to a rate that is greater than the rate charged to Developer in the Franchise Agreement being executed herewith. Developer acknowledges that Franchisor has the right, however, to charge then current published rates for advertising contributions and optional products and services offered to Developer in accordance with Franchisor's then current franchise disclosure document. The form of the Franchise Agreement attached as Exhibit IV and any future forms of Franchise Agreements referred to in this Section will also be included in the term "Franchise Agreement" as used in this Agreement.
3. TERM AND OWNERSHIP OF BUSINESS
- 3.1 Term. The term of this Agreement shall commence as of the date of execution hereof and shall end on the earlier of the last Development Deadline set forth in Section 5.1 below or the date on which the last Barbershop set forth in Section 5.1 below opens for business. After expiration of the term, or earlier termination of this Agreement as provided below, Franchisor shall have the right to establish, or license any other party to establish Barbershops anywhere within the Development Area; provided, however, that Developer's Protected Territory as defined in the Franchise Agreement(s)
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the development rights granted to the developer are not permanently exclusive. Section 3.1 states that after the expiration or earlier termination of the Development Agreement, Floyds 99 has the right to establish, or license any other party to establish Barbershops anywhere within the Development Area. However, the developer's Protected Territory, as defined in the Franchise Agreements, will remain in effect for the term of those agreements, unless sooner terminated. This indicates that while the overall development rights are not perpetually exclusive, a franchisee's specific territory may have some protection during the term of their individual Franchise Agreement.
However, according to section 5.2, if the Developer fails to construct and open any Floyds 99 Shop or maintain the cumulative number of Floyds 99 Shops open and operating in accordance with the Development Schedule, then the developer will be in default. If this occurs, Floyds 99 may operate or grant franchises to others to operate Floyds 99 Shops within the Development Area.
In practical terms, this means that a Floyds 99 developer's exclusive rights to develop within a specific area are contingent on adhering to the development schedule outlined in the agreement. If the developer fails to meet these obligations, Floyds 99 reserves the right to grant franchises to others within the same area. Prospective developers should carefully review the development schedule and ensure they have the resources and capabilities to meet these requirements to maintain their development rights.