After Hyper Kidz declines the offer, how long does the Hyper Kidz developer have to sell to the third party?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.3 Except as provided in Section 11.2, if you receive from an unaffiliated third party and desires to accept a bona fide written offer to purchase your business, Development Rights and interests, we shall have the option, exercisable within thirty (30) days after receipt of written notice setting forth the name and address of the prospective purchaser, the price and terms of such offer, and a copy of such offer and the other information stated in this Section 11.3, to purchase such business, Development Rights and interests, including your right to develop sites within the Development Area, on the same terms and conditions as offered by said third party.
In order that we may have information sufficient to enable us to determine whether to exercise this option, we may require you to deliver to us certified financial statements as of the end of your most recent fiscal year and such other information about your business and operations as we may request.
If we decline, or do not accept the offer in writing within thirty (30) days, you may, within thirty (30) days from the expiration of the option period, sell, assign and transfer your business, Development Rights and interest to said third party, provided we have consented to such transfer as required by this Section 11.
Any material change in the terms of the offer prior to closing of the sale to such third party shall constitute a new offer, subject to the same rights of first refusal by us or our nominee, as in the case of an initial offer.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, if a Hyper Kidz developer receives a legitimate offer from a third party to purchase their business, development rights, and interests, Hyper Kidz has the option to match that offer. Hyper Kidz has 30 days to exercise this option after receiving written notice of the offer, including the prospective buyer's details, price, terms, and a copy of the offer.
Should Hyper Kidz decline the offer in writing or fail to accept it within the 30-day option period, the developer has a limited window to proceed with the sale to the original third party. Specifically, the developer must sell, assign, and transfer their business, development rights, and interests to the third party within 30 days from the expiration of Hyper Kidz's option period. This is contingent on Hyper Kidz having already consented to the transfer as required by the agreement.
It is important to note that any significant changes to the terms of the offer before the sale closes would be considered a new offer, which would then be subject to Hyper Kidz's right of first refusal again. This ensures Hyper Kidz retains control over who enters their franchise system and under what terms.