Under the Floyds 99 guaranty, what happens if the Developer fails to make a payment?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Developer fails to pay when due any amount owed to Franchisor or its affiliates, under this Agreement or any other agreement, and does not correct such failure within 10 days after written notice of such failure is delivered to Developer;
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, if a Developer fails to pay any amount owed to Floyds 99 or its affiliates under any agreement, Floyds 99 has the right to terminate the agreement. However, the Developer has a 10-day cure period after receiving written notice of the failure to pay. If the Developer corrects the failure within this 10-day period, termination will not occur.
This clause is a standard protection for franchisors. It ensures that franchisees meet their financial obligations, which is critical for the franchisor's revenue and the brand's overall financial health. The 10-day cure period provides a reasonable opportunity for the franchisee to rectify the situation, which is a common practice in franchising to avoid immediate termination for minor oversights.
For a prospective Floyds 99 franchisee, this means that prompt payment of all fees and dues is essential. Failure to pay can lead to serious consequences, including termination of the franchise agreement. However, the 10-day notice and cure period offers a safeguard, allowing franchisees to correct any payment errors or delays before facing termination. It is important to maintain open communication with Floyds 99 regarding any potential payment issues to avoid misunderstandings and ensure compliance with the agreement.