Does Hyper Kidz agree to not unreasonably withhold consent to a sale, assignment or transfer?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Any assignment or transfer permitted by this Section 11 shall not be effective until we receive a completely executed copy of all transfer documents, and we consent in writing thereto.
- 11.5 Except as provided in Section 11.2 hereof, we agree not to unreasonably withhold our consent to a sale, assignment or transfer by you hereunder.
Consent to such transfer otherwise permitted or permissible as reasonable may be refused unless:
11.5.1 All of your obligations created by this Agreement, all other franchise documents, including all Franchise Agreements, and the relationship created hereunder are assumed by the transferee.
11.5.2 All ascertained or liquidated debts of you to us or our affiliated or subsidiary corporations are paid.
11.5.3 You are not in default hereunder.
11.5.4 We are reasonably satisfied that the transferee meets all of our requirements for new multi-unit developers, including but not limited to, good reputation and character, business acumen, operational ability, management skills, financial strength and other business considera
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Hyper Kidz agrees to not unreasonably withhold consent to a sale, assignment, or transfer by the franchisee. However, Hyper Kidz outlines specific conditions under which consent to a transfer may be refused.
Hyper Kidz may refuse consent if the transferee does not assume all of the franchisee's obligations under the agreement, all debts owed to Hyper Kidz or its affiliates are not paid, or the franchisee is in default of the agreement. Additionally, Hyper Kidz must be reasonably satisfied that the transferee meets the requirements for new multi-unit developers. These requirements include good reputation and character, business acumen, operational ability, management skills, and financial strength.
These stipulations are typical in franchising, as franchisors need to ensure that any new franchisee is capable of upholding the brand's standards and financial obligations. The $15,000 transfer fee covers Hyper Kidz's costs in facilitating the transfer and providing initial assistance to the new franchisee. This fee is also fairly standard in the franchise industry. The conditions listed in the FDD protect Hyper Kidz and its existing franchisees by ensuring that any new franchisee is well-qualified and financially stable.