What sections of the Floyds 99 Franchise Agreement must be consented to by owners of the franchisee who do not sign the Guaranty and Assumption of Franchisee's Obligations?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned owners (who are not otherwise identified as owners in the Franchise Agreement) and their respective spouses, and the undersigned spouses of those owners identified in the Franchise Agreement, hereby consent to the provisions of Sections 18.4 and 20.3 of the Franchise Agreement and agree that any interest which he or she owns in the Franchise Agreement, in the business operated thereunder, or in Franchisee (whether a separate property interest, community property interest, joint ownership interest, or otherwise) will be subject to Franchisor's option to purchase or right of first refusal, as applicable, described in said Sections.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, owners of the franchisee who do not sign the Guaranty and Assumption of Franchisee's Obligations must consent to specific sections of the Franchise Agreement. These owners, along with their spouses and spouses of owners identified in the Franchise Agreement, must consent to the provisions outlined in Sections 18.4 and 20.3 of the agreement. This consent is documented in Exhibit VI to the Franchise Agreement, titled "Consent to Option."
Sections 18.4 and 20.3 pertain to Floyds 99's option to purchase or right of first refusal regarding any interest the owner has in the Franchise Agreement, the business operated under it, or the Franchisee itself. This includes any type of ownership interest, such as separate property, community property, or joint ownership.
In practical terms, this means that if a prospective Floyds 99 franchisee has multiple owners, even those not directly guaranteeing the franchisee's obligations, must agree to give Floyds 99 the first chance to buy their stake in the business should they decide to sell. This ensures that Floyds 99 maintains control over who becomes involved in their franchise system and protects their brand. Prospective franchisees should carefully review Sections 18.4 and 20.3 to fully understand the implications of these provisions before signing the agreement.