What conditions must be met for a transfer of a Hyper Kidz multi-unit development agreement to be approved?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Multi- | Summary | |
|---|---|---|---|
| Unit Development Agreement | |||
| (l) Franchisor approval of transfer by multi-unit developer | Section 11 | We have the right to approve all transfers, our consent not to be unreasonably withheld | |
| (m) Conditions for franchisor approval of transfer | Section 11 | Conditions for transfer include not being in default, at least 25% of all Hyper Kidz Businesses required to be developed are open or under construction, all debts are paid, the buyer meets our current criteria for new multi-unit developers, you sign a general release, payment of transfer fee, buyer personally guarantees all obligations |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 41–49)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the franchisor has the right to approve all transfers of a multi-unit development agreement, and their consent will not be unreasonably withheld.
For Hyper Kidz to approve a transfer, several conditions must be met. The multi-unit developer must not be in default of their agreement. Additionally, at least 25% of all Hyper Kidz businesses required to be developed under the agreement must be open or under construction. All debts owed to Hyper Kidz must be paid in full.
Furthermore, the buyer must meet Hyper Kidz's current criteria for new multi-unit developers, ensuring they are qualified to continue developing the brand. The seller (transferor) is required to sign a general release, which typically releases Hyper Kidz from any future claims related to the transferred agreement. A transfer fee must be paid to Hyper Kidz, and the buyer must personally guarantee all obligations under the multi-unit development agreement, providing Hyper Kidz with additional security.