Besides the franchisee and Hyper Kidz, on whom else is the Hyper Kidz Franchise Agreement binding?

According to the 2024 Hyper Kidz Franchise Disclosure Document, the Franchise Agreement is also binding on the franchisee's Principals. The term "Principals" refers to all individuals or entities holding direct or indirect legal or beneficial ownership interests in the franchisee, as well as those with other direct or indirect property rights in the franchisee, the Franchise Agreement, the franchise, or the Hyper Kidz Business. Each Principal having an equity ownership interest is designated as an Owner on Attachment 7 to the Franchise Agreement.

This means that individuals with ownership stakes or property rights in the franchise are also legally obligated to adhere to the terms of the Franchise Agreement. This provision ensures that all parties with a significant interest in the Hyper Kidz Business are accountable for upholding the agreement's stipulations.

For a prospective Hyper Kidz franchisee, this implies that anyone considered a Principal must also comply with the Franchise Agreement. Therefore, it is crucial for franchisees to ensure that all Principals are fully aware of and agree to the terms of the Franchise Agreement, as their actions can have legal ramifications for the franchise. This requirement is not uncommon in franchising, as franchisors often seek to bind all controlling parties to ensure consistent operation and brand protection.