What is the 'Approved Location' in the context of a Hyper Kidz franchise?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
irst refusal to notify us whether you will purchase the additional Hyper Kidz Business. If you decline the right of first refusal, or if you fail to notify us within the thirty (30) day period, we will be free to sell the Hyper Kidz Business to the prospective franchisee and you will have no further interest in the proposed area.
ARTICLE 4: DEVELOPMENT AND OPENING OF THE HYPER KIDZ BUSINESS
4.1 Approval of Site
- 4.1.1 Within one hundred eighty (180) days from the date hereof, you will submit to us such demographic, commercial and other information, and photographs as we may require in order to evaluate the site you propose to use for your Hyper Kidz Business. You acknowledge that in reviewing a proposed site we may consider such matters as we deem material including, without limitation, demographic characteristics of the proposed site, traffic patterns, parking, the predominant character of the neighborhood, competition from other businesses providing similar services within the area (including other Hyper Kidz Businesses), the number of households, income levels, population, the purchase price or lease terms for the proposed site and other commercial characteristics, the size of the premises, appearance, and other physical characteristics of the proposed site.
- 4.1.2 We will approve or disapprove the site you propose for the operation of the Hyper Kidz Business by giving written notice to you. We agree to use reasonable efforts to deliver such notice to you within thirty (30) days after we receive the complete site documentation and any other materials we request regarding you and the proposed site. We will not unreasonably withhold our approval of a proposed site that meets our standards and specifications for Hyper Kidz Businesses. Upon our approval of a proposed site for the Hyper Kidz Business, the address of the Hyper Kidz Business will be inserted on Attachment 3 to this Agreement. If you are unable to find a suitable location for your Hyper Kidz Business within one hundred eighty (180) days after you sign this Agreement, we will provide you with an additional thirty (30) days to locate a suitable site. If you do not locate a suitable site within this additional thirty (30) day period, we may provide you with an additional extension, in our discretion, or we may terminate this Agreement.
- 4.1.3 You hereby acknowledge and agree that our approval of the Site does not constitute an express or implied assurance, representation or warranty of any kind as to the suitability of the Site for a Hyper Kidz Business or for any other purpose. Our approval of the Site indicates only that we believe the Site complies with acceptable minimum criteria established by us solely for our purposes as of the time of
evaluation. You and we acknowledge that application of criteria that have been effective with respect to other sites may not be predictive of potential for the Hyper Kidz Business and that, subsequent to our approval of the Site, demographic and/or economic factors included in or excluded from our criteria could change, thereby altering the potential of the Site. Such factors are unpredictable and are beyond our control. We shall not be responsible for the failure of the Site to meet your expectations as to revenue, operational performance or other measures. You further acknowledge and agree that your acceptance of a Franchise for the operation of the Hyper Kidz Business at the Site is based on your own independent investigation of the suitability of the Site.
4.2 Approval of Lease
4.2.1 Upon our approval of a proposed site, you will attempt to obtain lawful possession of the approved Site through your direct purchase, lease or sublease. The lease or sublease for the Site shall be in a form satisfactory to us and: (a) provide for concurrent, written notice to us of your default under said lease or sublease; (b) provide for our right, in our sole discretion, to cure your default under said lease or sublease; (c) provide for your right to assign your interest under said lease or sublease to us without the lessor's or sublessor's consent; (d) authorize and require the lessor or sublessor to disclose to us upon our request sales and other information furnished to the lessor or sublessor by you; (e) provide that we shall have the right, in our sole discretion, upon termination of this Agreement or expiration of this Agreement, without the grant of a successor franchise, to assume said lease or sublease; (f) provide for the lessor's or sublessor's consent to your display of the Marks in accordance with our specifications, subject only to applicable law; (g) provide that it may not be materially modified without our prior written consent and that we will receive copies of such modifications when proposed and when executed; and (h) include an executed copy of the Collateral Assignment of Lease, which is attached hereto as Attachment 6, or a substantially similar form.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the 'Approved Location' refers to a site that Hyper Kidz has approved for the franchisee to operate their Hyper Kidz Business. The franchisee must submit demographic, commercial, and other information, including photographs, for Hyper Kidz to evaluate the proposed site. Hyper Kidz will consider factors such as demographics, traffic patterns, parking, competition, number of households, income levels, purchase price or lease terms, size of the premises, appearance, and other physical characteristics.
Hyper Kidz has 30 days to provide written notice of approval or disapproval after receiving complete site documentation. Hyper Kidz agrees to not unreasonably withhold approval of a site that meets their standards. Once a site is approved, the address of the Hyper Kidz Business will be added to Attachment 3 of the Franchise Agreement. If a franchisee cannot find a suitable location within 180 days of signing the agreement, Hyper Kidz may grant an additional 30 days or terminate the agreement.
The FDD emphasizes that Hyper Kidz's approval of a site does not guarantee its suitability or success. The franchisee acknowledges that the approval only indicates that the site meets the minimum criteria established by Hyper Kidz at the time of evaluation. Demographic and economic factors can change, affecting the site's potential, and Hyper Kidz is not responsible if the site fails to meet the franchisee's expectations regarding revenue or operational performance. The franchisee is expected to conduct their own independent investigation of the site's suitability.
Upon Hyper Kidz's approval of a site, the franchisee must obtain lawful possession through purchase, lease, or sublease. The lease or sublease must be in a form satisfactory to Hyper Kidz and include specific provisions such as concurrent written notice to Hyper Kidz of any default, Hyper Kidz's right to cure defaults, the franchisee's right to assign the lease to Hyper Kidz, authorization for the lessor to disclose sales information to Hyper Kidz, Hyper Kidz's right to assume the lease upon termination or expiration of the agreement, consent for the franchisee to display Hyper Kidz's marks, and a requirement for Hyper Kidz's prior written consent for any material modifications.