Under what conditions can Floyds 99 assign the lease to another franchisee?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The lease for the Franchised Location shall contain provisions set forth in detail in the Operations Manual (defined in Section 8.1 below), which may include the following: (1) providing for an initial term, or an initial term together with any renewal terms (for which rent must be specified in the lease) of at least 10 years; (2) expressing the landlord's consent to the Franchisee's use of the Marks and all required signage for the Barbershop; (3) giving the Franchisor the right to enter the premises and make any modification necessary to protect the Marks and the Licensed Methods; (4) allowing the Franchisor, or its designee, to have the option to assume the lease and the right following such assumption to assign the lease or sublet the leased premises to another FLOYD'S 99 franchisee for all or any part of the lease term without further landlord consent if the Franchisee defaults under the lease or this Agreement or if this Agreement terminates or expires; (5) requiring the landlord to give the Franchisor written notice of any defaults by the Franchisee under such lease and the right to cure any such defaults; and (6) the lease shall also contain restrictive use clauses which are acceptable to the Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the lease for the franchised location must include a clause that allows Floyds 99, or its designee, the option to assume the lease. Following the assumption of the lease, Floyds 99 has the right to assign the lease or sublet the premises to another Floyds 99 franchisee. This assignment or subletting can be for the entire lease term or any part of it, without needing further consent from the landlord.
This right of assignment comes into play if the franchisee defaults under the lease agreement or the franchise agreement itself terminates or expires. This provision ensures that Floyds 99 has a mechanism to maintain control over the location and continue operations under the brand name, even if the original franchisee is no longer able to operate the business.
For a prospective franchisee, this means that the lease agreement is not solely between them and the landlord. Floyds 99 has a significant interest and rights within that lease. It is crucial for franchisees to understand that their lease can be assigned to another franchisee under certain circumstances, which could impact their long-term control over the business location. The franchisee should ensure they fully understand the conditions under which Floyds 99 can exercise this right and how it might affect their investment and business operations.