Must I disclose to Hyper Kidz any new ideas or concepts I develop related to the Hyper Kidz business?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
You must agree to disclose to us all ideas, concepts, promotional materials, methods, techniques and products relating to the development and operation of Hyper Kidz Businesses conceived or developed by you or your employees during the term of the Franchise Agreement. You must grant to us and agree to obtain from your affiliates, Principals or employees a perpetual, non-exclusive and worldwide right to use these new ideas, concepts, promotional materials, methods, techniques and products in all Hyper Kidz Businesses or other businesses operated by us, our affiliates and franchisees. We have no obligation to make any payment with respect to any idea, concept, method, technique or product. You agree that you will not use, nor will you allow any other person or entity to use, any concept, method, technique or product without obtaining our prior written approval.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 38–40)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees are obligated to disclose any new ideas or concepts related to the Hyper Kidz business that they or their employees develop during the term of the Franchise Agreement. This includes ideas, concepts, promotional materials, methods, techniques, and products.
Hyper Kidz requires franchisees to grant them a perpetual, non-exclusive, and worldwide right to use these new developments in all Hyper Kidz businesses or other businesses operated by Hyper Kidz, its affiliates, and franchisees. Importantly, Hyper Kidz is not obligated to provide any payment or compensation for the use of these ideas, concepts, methods, techniques, or products. Furthermore, franchisees are prohibited from using or allowing others to use any such concept, method, technique, or product without obtaining prior written approval from Hyper Kidz.
This clause is fairly common in franchise agreements, as franchisors seek to maintain uniformity and control over their brand and system. However, it's crucial for prospective Hyper Kidz franchisees to understand that any innovation they bring to the business may be used by the franchisor without compensation. Franchisees should carefully consider this when deciding whether to invest in a Hyper Kidz franchise and may want to discuss the potential for future compensation or recognition for successful innovations with the franchisor.