What constitutes a 'transfer' by a Hyper Kidz multi-unit developer under the Multi-Unit Development Agreement?

According to the 2024 Hyper Kidz Franchise Disclosure Document, a transfer by a multi-unit developer includes the transfer of any interest in the Multi-Unit Development Agreement. This definition is important for prospective multi-unit developers to understand, as any action that involves transferring rights or obligations under the agreement will be considered a transfer.

Hyper Kidz, as the franchisor, has the right to approve all transfers, and this consent will not be unreasonably withheld. However, there are specific conditions that must be met for the franchisor to approve a transfer. These conditions include ensuring that the multi-unit developer is not in default, that at least 25% of the Hyper Kidz businesses required to be developed are open or under construction, and that all debts are paid.

Additionally, the buyer must meet Hyper Kidz's current criteria for new multi-unit developers, and the seller must sign a general release and pay a transfer fee. The buyer is also required to personally guarantee all obligations. Hyper Kidz also retains the right of first refusal, allowing them to match any offer to purchase the multi-unit developer's business. These provisions ensure that Hyper Kidz maintains control over who becomes a developer within their system and that certain standards are upheld during any transfer of the Multi-Unit Development Agreement.