What state's law governs the Floyds 99 Franchise Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 19.1 | 10 years |
| b. | Renewal or extension of the | Sections 19.3 and | Term in then-current Franchise |
| term | 19.4 | Agreement. | |
| c. | Requirements for franchisee to renew or extend | Section 19.3 | Remodel, pay fee, sign new agreement and release. You may be asked to sign a contract with materially different terms and conditions than your original contract if you choose to renew. |
| d. | Termination by franchisee | Not Applicable | Not Applicable |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with | Sections 20.1 and | We can terminate only if you commit |
| cause | 20.2 | any one of several listed violations. | |
| g. | “Cause” defined – curable | Sections 20.1 and | 30 days for operational defaults, 10 |
| defaults | 20.2 | days for monetary defaults. | |
| h. | “Cause” defined – non-curable defaults | Section 20.1 | Unauthorized disclosure, conviction of a crime, abandonment, unapproved transfers, bankruptcy, assignment for benefit of creditors, unsatisfied judgments, levy, foreclosure, repeated violations, misuse of Marks. |
| i. | Franchisee’s obligations on termination / nonrenewal | Section 20.4 | Pay outstanding amounts, de- identification of the Barbershop, return of confidential information, covenant not to compete (see also r. below). |
| j. | Assignment of contract by franchisor | Section 18.6 | No restriction on our right to assign. |
| k. | “Transfer” by franchisee – definition | Section 18.1 | Includes transfer of Franchise Agreement or of the Barbershop or its |
| 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. |
| l. | 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. |
| o. | Franchisor’s option to purchase franchisee’s business | Not Applicable | Not Applicable |
| p. | Death or disability of franchisee | Section 8.7 | Interest in Development Agreement must be assigned to approved assignee within 12 months of death and within 6 months of disability. |
| q. | Non-competition covenants during the term of the franchise | Section 11.1 | No involvement in competing business and no diversion. |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 11.2 | No competing business for 2 years within 25 miles of your FLOYD’S 99 Shops or any other FLOYD’S 99 Shop. |
| s. | Modification of the agreement | Section 13.1 | No modification except on execution of a written agreement. |
| Provision | Section in Franchise Agreement | Summary | |
| u. | Dispute resolution by arbitration or mediation | Not Applicable | Not Applicable |
| v. | Choice of forum | Section 24.4 | Litigation in Colorado (subject to state law). |
| W. | Choice of law | Section 24.4 | Colorado law applies (subject to state law). |
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, the Franchise Agreement is governed by Colorado law. Specifically, Section 24.4 of the Franchise Agreement dictates that Colorado law applies to legal matters, although this is subject to state law. This means that if a franchisee has a legal dispute with Floyds 99 related to the Franchise Agreement, the laws of Colorado will generally be used to interpret the agreement and resolve the dispute.
This "choice of law" provision is a standard clause in franchise agreements. It aims to provide clarity and predictability regarding which jurisdiction's laws will govern the contractual relationship. However, the phrase "subject to state law" indicates that certain state-specific franchise laws where the franchisee operates may override the general application of Colorado law. For example, many states have franchise relationship laws that protect franchisees from unfair termination practices, and these laws could take precedence over the contractual terms.
For a prospective Floyds 99 franchisee, it's important to understand the implications of this clause. While Colorado law generally applies, franchisees should also be aware of any franchise-specific laws in their own state that may provide additional protections or impose different requirements. Consulting with a franchise attorney is crucial to fully understand these legal nuances and how they might affect the franchisee's rights and obligations.