What does Article 19 of the Hyper Kidz Franchise Agreement cover?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 22: CONTRACTS]
ARTICLE 19: RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION
19.1 Payment of Amounts Owed to Us and Our Affiliates
You shall immediately pay to us and our Affiliates upon termination or expiration of this Agreement such Royalty Fees, Brand Development Fees, amounts owed for purchases by you from us or our Affiliates, interest due on any of the foregoing and all other amounts owed to us or our Affiliates which are then unpaid.
19.2 Marks, Copyrights and Trade Dress
19.2.1 Upon the termination or expiration of this Agreement, you shall:
(a) not thereafter, directly or indirectly, at any time or in any manner identify yourself or any business as a current or former Hyper Kidz Business or as a current or former franchisee of ours or otherwise associated with us, or use any Mark, any colorable imitation thereof or any mark substantially identical to or deceptively similar to any Mark in any manner or for any purpose, or utilize for any purpose any trade name, trademark or service mark, domain name, or other commercial symbol or trade dress that suggests or indicates a connection or association with us;
(b) remove all signs containing any Mark and return to us or destroy forms and materials containing any Mark or otherwise identifying or relating to a Hyper Kidz Business;
(c) take such action as may be required to cancel or, at our option, to transfer to us or our designee all fictitious or assumed name or equivalent registrations relating to your use of any Mark;
(d) Assignment of Numbers and Listings.
At Franchisor's request, Franchisee shall execute such forms and documents as Franchisor deems necessary to appoint Franchisor its true and lawful attorney-in-fact, with full power and authority, for the sole purpose of assigning to Franchisor, Franchisee's telephone numbers and listings; and provide Franchisor with passwords and administrator rights for all email, software, social media or other such accounts used or created by Franchisee in order to operate the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Article 19 outlines the rights and obligations of the franchisee and franchisor upon the termination or expiration of the franchise agreement. This section is crucial for a franchisee to understand, as it details the financial and operational steps required when the agreement concludes.
Specifically, Article 19.1 states that upon termination or expiration, the franchisee must immediately pay Hyper Kidz and its affiliates all outstanding Royalty Fees, Brand Development Fees, amounts owed for purchases, any accrued interest, and all other unpaid amounts. This means a franchisee needs to be prepared to settle all financial obligations promptly to avoid any legal repercussions.
Furthermore, Article 19.2 addresses the use of Hyper Kidz's intellectual property. Upon termination or expiration, the franchisee must cease identifying themselves as a current or former Hyper Kidz franchisee, discontinue using any Marks or similar identifying elements, remove all signs displaying any Mark, and return or destroy any materials containing the Mark. Additionally, the franchisee must take necessary actions to cancel or transfer any assumed name registrations related to the use of any Mark to Hyper Kidz. At the franchisor's request, the franchisee must also assign telephone numbers and listings and provide passwords and administrator rights for all email, software, social media, or other accounts used to operate the franchised business. This ensures that the franchisee completely disassociates from the Hyper Kidz brand and system, protecting the brand's integrity and preventing any potential misuse of its identity.
In summary, Article 19 of the Hyper Kidz franchise agreement clearly defines the financial responsibilities and the proper handling of intellectual property and digital assets when the franchise agreement ends, whether through termination or expiration. Franchisees must adhere to these stipulations to avoid legal issues and ensure a smooth transition.