After termination or expiration of the Floyds 99 franchise agreement, what payments are the franchisee obligated to make to the franchisor?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
or purchase of the FLOYD'S 99 Shop or its assets by the Franchisor.
- e. If the Franchisor does not exercise the Franchisor's right to purchase the Franchisee's FLOYD'S 99 Shop as set forth above, the Franchisee will be free to keep or to sell, after such termination or expiration, to any third party, all of the physical assets of its FLOYD'S 99 Shop; provided, however, that all appearances of the Marks and the Franchisor's color scheme and trade dress are first removed in a manner approved in writing by the Franchisor.
- 20.4 Obligations of Franchisee Upon Termination or Expiration. The Franchisee is obligated upon termination or expiration of this Agreement to immediately:
- a. Pay to the Franchisor all Royalties, National Marketing Contributions, other fees, and any and all amounts or accounts payable then owed the Franchisor or its affiliates pursuant to this Agreement, or pursuant to any other agreement, whether written or oral, including subleases and lease assignments, between the parties;
- b. Cease to identify itself as a FLOYD'S 99 franchisee or publicly identify itself as a former Franchisee or use any of the Franchisor's trade secrets, signs, symbols, devices, trade names, trademarks or other materials;
- c.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, the franchisee is obligated to make certain payments to Floyds 99. Specifically, the franchisee must immediately pay all outstanding Royalties, National Marketing Contributions, other fees, and any and all amounts or accounts payable then owed to Floyds 99 or its affiliates. This includes obligations stemming from the franchise agreement itself, as well as any other agreements, whether written or oral, such as subleases and lease assignments between the parties.
This provision ensures that Floyds 99 receives all outstanding payments owed by the franchisee up to the point of termination or expiration. It covers a broad range of potential financial obligations, reflecting the various fees and contributions franchisees typically make during the course of the agreement. The franchisee should be aware that these payments are due immediately upon termination or expiration, which could impact their financial planning as they exit the franchise system.
Furthermore, the FDD also mentions that if Floyds 99 exercises its option to purchase the franchisee's shop, the purchase price will be determined by an independent third-party appraisal. If the Franchisor and Franchisee cannot agree on the fair market value of the FLOYD'S 99 Shop, then the fair market value shall be determined by an independent third-party appraisal. The Franchisor and the Franchisee shall each select one independent, qualified appraiser, and the two so selected shall select a third appraiser, all three to determine the fair market value of the FLOYD'S 99 Shop. The purchase price shall be the median of the fair market values as determined by the three appraisers operating independently. The parties shall bear the expenses of their selected appraiser and shall evenly split the expenses of the third appraiser. This process ensures a fair valuation of the business in the event of a purchase by Floyds 99.