What document must be executed by the transferring parties in a Hyper Kidz franchise transfer?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
(d) you and your Principals or the transferring Principal(s) and the transferee (if it is then a franchisee of ours) must execute a general release in form satisfactory to us of any and all claims against us, our Affiliates and our respective shareholders, officers, directors, employees and agents; and
(h) if this Agreement is being transferred, you and your Principals must execute a non-competition agreement in favor of us and the transferee.
If a Principal is transferring his/her interest, such Principal must execute a non-competition agreement in favor of us and the transferee.
In either case, the non-competition agreement shall provide that neither you, your Principal(s) nor your transferring Principal(s) (whichever is applicable) nor any member of their immediate families shall directly or indirectly for a period of two (2) years commencing on the effective date of such transfer:
(1) have any interest as a disclosed or beneficial owner in any Competitive Business located or operating within fifteen (15) miles of your Hyper Kidz Business or any other Hyper Kidz Business in the System; or
(2) perform services as a director, officer, manager, employee, consultant, representative, agent, or otherwise for any Competitive Business located or operating within fifteen (15) miles of your Hyper Kidz Business or any other Hyper Kidz Business in the System.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, in order to transfer a franchise, both the transferring parties must execute a general release and a non-competition agreement. Specifically, you and your Principals or the transferring Principal(s) and the transferee (if it is then a franchisee of ours) must execute a general release in form satisfactory to us of any and all claims against us, our Affiliates and our respective shareholders, officers, directors, employees and agents.
Additionally, if the franchise agreement is being transferred, you and your Principals must execute a non-competition agreement in favor of Hyper Kidz and the transferee. If a Principal is transferring his/her interest, such Principal must execute a non-competition agreement in favor of Hyper Kidz and the transferee.
The non-competition agreement stipulates that for two years from the transfer date, neither you, your Principal(s), nor your transferring Principal(s), nor any immediate family member, can have an interest in or work for a Competitive Business within 15 miles of any Hyper Kidz location. This protects Hyper Kidz's market and customer base after a transfer.