What can Hyper Kidz or its affiliates do with the allowances collected from suppliers based on a Hyper Kidz franchisee's purchases?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates, based upon your purchases of products and services from manufacturers, suppliers, and distributors. We or our affiliates will have all of your right, title, and interest in and to any and all of these Allowances. We or our affiliates may collect and retain any or all of these Allowances without restriction (unless otherwise instructed by the manufacturer, supplier, or distributor). We may also choose to contribute these Allowances to the Brand Development Fund, but if we do so it does not reduce or eliminate your obligation to pay the Brand Development Fee. During the fiscal year ended December 31, 2023, we did not earn any Allowances.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, Hyper Kidz has the right to collect and retain allowances, rebates, credits, incentives, or benefits from manufacturers, suppliers, and distributors based on a franchisee's purchases of products and services. Hyper Kidz or its affiliates possess all rights to these allowances. They can collect and retain any or all of these allowances without restriction, unless the manufacturer, supplier, or distributor provides other instructions.
Hyper Kidz also has the option to contribute these allowances to the Brand Development Fund. However, if Hyper Kidz chooses to contribute the allowances to the Brand Development Fund, this contribution does not reduce or eliminate the franchisee's obligation to pay the Brand Development Fee.
For the fiscal year ending December 31, 2023, Hyper Kidz states that it did not earn any allowances. This indicates that while the right to collect allowances exists, franchisees should verify with Hyper Kidz how often these allowances are collected and how they are used, as it can impact the overall cost of goods and services for the franchise.