What is the consequence if Hyper Kidz chooses to contribute allowances to the Brand Development Fund?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
We have the right to collect and retain any and all allowances, rebates, credits, incentives, or benefits (collectively, "Allowances") offered by manufacturers, suppliers, and distributors to you, to us, or to our affiliates, based upon your purchases of products and services from manufacturers, suppliers, and distributors. We or our affiliates will have all of your right, title, and interest in and to any and all of these Allowances. We or our affiliates may collect and retain any or all of these Allowances without restriction (unless otherwise instructed by the manufacturer, supplier, or distributor). We may also choose to contribute these Allowances to the Brand Development Fund, but if we do so it does not reduce or eliminate your obligation to pay the Brand Development Fee. During the fiscal year ended December 31, 2023, we did not earn any Allowances.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, Hyper Kidz has the right to collect allowances, rebates, credits, incentives, or benefits from manufacturers, suppliers, and distributors based on a franchisee's purchases of products and services. Hyper Kidz, or its affiliates, retain all rights to these allowances.
Hyper Kidz can choose to contribute these allowances to the Brand Development Fund. However, according to the FDD, if Hyper Kidz chooses to contribute these allowances to the Brand Development Fund, this contribution does not reduce or eliminate a franchisee's obligation to pay the Brand Development Fee.
For a prospective Hyper Kidz franchisee, this means that even if Hyper Kidz receives allowances and puts them towards the Brand Development Fund, the franchisee is still responsible for paying the full Brand Development Fee as outlined in their agreement. The FDD also states that during the fiscal year ended December 31, 2023, Hyper Kidz did not earn any Allowances.