What actions constitute a curable default that could lead to termination of the Hyper Kidz Multi-Unit Development Agreement, according to Section 9?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Multi- | Summary | |
|---|---|---|---|
| Unit Development Agreement | |||
| (c) Requirements for multi- | None | Not applicable | |
| unit developer to renew | |||
| or extend | |||
| (d) Termination by multi- | None | You may seek to terminate on any grounds | |
| unit developer | available to you at law | ||
| (e) Termination by | None | Not applicable | |
| franchisor without | |||
| cause | |||
| (f) Termination by | Section 9 | We can terminate if you commit any one of | |
| franchisor with cause | several listed violations | ||
| (g) “Cause” defined – curable defaults | Section 9 | If you use the Marks or System without our consent; participating in a Competitive Business; failure to pay money to us when due; you begin developing a Hyper Kidz Business before all of your pre-development obligations are met; failure to obtain our consent when required; you open any Hyper Kidz Business before a Franchise Agreement for that Hyper Kidz Business has been signed |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 41–49)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, Section 9 of the Multi-Unit Development Agreement outlines specific violations that could lead to termination if they are not corrected. These curable defaults include using the Hyper Kidz Marks or System without the franchisor's consent, participating in a Competitive Business, or failing to pay money owed to Hyper Kidz when due.
Additional curable defaults include starting to develop a Hyper Kidz Business before fulfilling all pre-development obligations, failing to obtain the franchisor's consent when it is required, and opening a Hyper Kidz Business before a Franchise Agreement for that specific business has been signed.
It is important for prospective multi-unit developers to understand these conditions, as failure to cure these defaults within the time frame specified in the agreement could result in the termination of their development rights. This could lead to significant financial losses, as the developer may have already invested time and resources into site selection, pre-development activities, and other preparations.