Can the Hyper Kidz Brand Development Fund invest any surplus for future use?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
on advertising that is a solicitation of new franchisees.
The Fund is held in an account separate from our general funds. We may spend in any fiscal year an amount greater or less than the aggregate contribution of all Hyper Kidz Businesses to the Fund in that year and the Fund may borrow from us or other lenders at standard commercial interest rates to cover deficits of the Fund or cause the Fund to invest any surplus for future use by the Fund. Any money remaining in the Fund at the end of any year will carry over to the next year. We will prepare within 120 after each fiscal year end, and furnish to you upon written request, an annual, unaudited statement of money collected and costs incurred by the Fund.
The Brand Fund and its earnings shall not otherwise inure to our benefit except that any resulting technology and intellectual property shall be deemed our property.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–33)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the Brand Development Fund may invest any surplus for future use. Hyper Kidz has the discretion to manage the fund, including investing surplus funds. Any money remaining in the Fund at the end of any year will carry over to the next year.
Hyper Kidz also has the right to borrow from lenders to cover deficits of the Fund. This provides Hyper Kidz with flexibility in managing the Fund's finances and ensuring that it has sufficient resources to support brand development, advertising, marketing, and public relations programs.
Within 120 days after each fiscal year end, Hyper Kidz will prepare and furnish to franchisees upon written request, an annual, unaudited statement of money collected and costs incurred by the Fund. This provides franchisees with transparency into how the Fund is being managed and how their contributions are being used. The Brand Development Fund spending went towards 10% Local SEO, 20% Social Media Marketing, 10% Email Marketing, 10% Content Marketing, 10% Online Advertising, 10% Public Relations, 10% Sponsorships & Partnerships, 10% Local Events, 5% Customer Loyalty Programs, 5% Training and Support for the fiscal year which ended on December 31, 2023.