Does the Hyper Kidz agreement survive the termination of the Franchise Agreement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
19.5 Continuing Obligations
All obligations of ours and yours which expressly or by their nature survive or are intended to survive the expiration or termination of this Agreement shall continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied in full or by their nature expire.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, certain obligations continue even after the Franchise Agreement terminates or expires. Specifically, Section 19.5 states that any obligations that are explicitly designed to survive termination, or naturally survive termination, will remain in effect. This means that certain aspects of the agreement, such as those related to confidential information, non-compete clauses, and payment obligations, may extend beyond the agreement's formal end date.
The agreement outlines specific post-termination obligations for the franchisee. For instance, the franchisee must immediately cease using Hyper Kidz's confidential information and return all copies of the Operations Manual and other confidential materials. Additionally, a non-compete covenant restricts the franchisee and their principals from engaging in any competitive business within a 15-mile radius of the Hyper Kidz Business for two years after termination or expiration.
Hyper Kidz also retains the right to purchase the assets of the Hyper Kidz Business upon termination or expiration of the agreement. Furthermore, the franchisee is obligated to remove all signs and materials bearing Hyper Kidz's marks and to cease identifying themselves as a current or former Hyper Kidz franchisee. These clauses ensure the protection of Hyper Kidz's brand, trade secrets, and market position even after a franchise relationship ends.