Who is considered a third-party beneficiary of the Hyper Kidz agreement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- (e) will require all Principals and all employees and Principals who will have access to Confidential Information, including, without limitation, managers and other personnel who attend our training programs, to execute Confidentiality and Non-Competition Agreements in the form attached hereto as Attachment 9. We shall be a third-party beneficiary of such agreements with the independent right to enforce their terms. You shall provide, at our request, executed originals of each such Confidentiality and Non-Competition Agreement. Failure to procure execution of a Confidentiality and Non-Competition Agreement shall be a material breach of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Hyper Kidz is considered a third-party beneficiary in specific agreements. Principals and employees who have access to confidential information are required to sign Confidentiality and Non-Competition Agreements. Hyper Kidz has the independent right to enforce the terms of these agreements as a third-party beneficiary.
This means that Hyper Kidz can directly take legal action to enforce the terms of the Confidentiality and Non-Competition Agreements, even though they are not a direct party to the agreement between the franchisee and their employees or principals. This is a significant protection for Hyper Kidz, as it allows them to safeguard their confidential information and prevent unfair competition.
For a prospective Hyper Kidz franchisee, this highlights the importance of ensuring that all principals and employees with access to confidential information execute the required agreements. Failure to do so constitutes a material breach of the franchise agreement and could expose the franchisee to legal action from Hyper Kidz. Franchisees should carefully review the form of the Confidentiality and Non-Competition Agreement (Attachment 9) to understand the specific obligations and restrictions imposed on their personnel.