Under what circumstances does Floyds 99 reserve the right to modify fees?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
all FLOYD'S 99 Barbershops unless otherwise specified.
ITEM 6. OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty1 | 6% of Gross Sales | Payable on the day of the week we periodically designate, based on prior week's Gross Sales | Gross Sales include all revenue from the Barbershop, including sales made away from the Barbershop premises. Gross Sales do not include sales taxes and discounts that have been approved by us in advance. Royalties are paid by electronic transfer of funds. |
| National Marketing Contribution1 | Currently 1.5% of Gross Sales, but we can require (upon 90 days' notice to you) up to a maximum of 3.0% of Gross Sales. The combination of the National Marketing Contribution and Local Advertising Allocation will not exceed a total of 4% of Gross Sales. (See Royalty Remarks above for discussion of "Gross Sales") | Payable on the day of the week we periodically designate, based on prior week's Gross Sales | We currently collect a National Marketing Contribution equal to 1.5% of Gross Sales and reserve the right to increase this amount up to 3.0% of Gross Sales on 90 days' prior written notice to you. Contributions are used primarily for production of advertising and marketing for the Barbershops. See Item 11. Our affiliate-owned Barbershops contribute the same as franchisee-owned Barbershops. The National Marketing Contribution is paid by electronic transfer of funds separate from the royalty transfer. Certain franchisees that signed Franchise Agreements prior to the date of this Disclosure Document have a National Marketing Contribution requirement of 1% of Gross Sales. |
| Local Advertising Allocation2 | 1% to 2% of Gross Sales The combination of the National Marketing Contribution and Local Advertising Allocation will not exceed a total of 4% of Gross Sales. | As incurred | The Local Advertising Allocation is in addition to the National Marketing Contribution, but is retained by you to advertise your Barbershop. This is the minimum average you must spend each calendar quarter, with a report of expenditures submitted as part of your required financial reporting to us. Funds spent on local advertising must be focused on the promotion of your Shop to consumers. Funds spent through sites or networks such as Indeed, Craigslist, or other similar sites or professional networks, whether to recruit employees or for other purposes, are not approved as local advertising. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the company has the right to modify certain fees under specific conditions. The National Marketing Contribution is currently set at 1.5% of Gross Sales, but Floyds 99 reserves the right to increase this amount up to a maximum of 3.0% of Gross Sales. However, they must provide franchisees with 90 days' prior written notice before implementing such an increase. The combination of the National Marketing Contribution and the Local Advertising Allocation will not exceed a total of 4% of Gross Sales.
Floyds 99 also has the ability to modify the Renewal Fee. While they currently waive the initial franchise fee for franchisees who renew their agreements, they explicitly reserve the right to change this policy at any time. This means that upon renewal, a franchisee may be required to pay a renewal fee equal to 20% of the then-current initial franchise fee for a single (first) Franchise Agreement.
Additionally, Floyds 99 may implement Regional Advertising Co-ops, which are not currently assessed. If such co-ops are established in a franchisee's area, recurring contributions of up to 2% of Gross Sales may be required. If Floyds 99 forms a cooperative, franchisees will be bound by the decisions of the majority of the members regarding expenditures, assessments, and dues, to the extent that Floyds 99 approves them. The Local Advertising Allocations of co-op members will reduce proportionally in this case.