What documents are Hyper Kidz franchisees required to execute to renew their franchise agreement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
ARTICLE 17: GRANT OF SUCCESSOR FRANCHISES
17.1 Successor Agreement
If you satisfy each of the requirements set forth below, you may renew for one (1) additional term of ten (10) years.
- 17.1.1 You shall have been, throughout the initial term of this Agreement, in substantial compliance, and at the expiration of such initial term are in full compliance, with this Agreement, your lease or sublease and all other agreements between you and us or companies or persons associated or affiliated with us.
- 17.1.2 You shall, within six (6) months before the expiration of the initial term, but not later than three (3) months before the expiration of the initial term, provide written notice to us that you wish to sign a Successor Agreement, and we, in turn, shall provide you with any documents that you are required to execute for the successor term, which documents may include, but are not limited to, a general release, our Successor Agreement and all other ancillary agreements, instruments and documents then customarily used by us in the granting of Hyper Kidz Franchises and will require payment of the Successor Agreement Fee. (the "Successor Franchise Documents").
- 17.1.3 You shall execute the Successor Franchise Documents and all other documents and instruments that we require in order to renew. You shall return the executed Successor Franchise
Documents to us, together with payment of a Successor Agreement Fee equal to fifty percent (50%) of our then-current initial franchise fee, by no later than the expiration date of this Agreement. If we do not receive the executed documents and Successor Agreement Fee by such expiration date, then this Agreement shall expire, you shall have no further rights under this Agreement, and you shall comply with the provisions of Article 19 and any other provisions that survive termination or expiration of this Agreement.
17.1.4 After we have received from you all executed Successor Franchise Documents and the Successor Agreement Fee, we shall inspect your Hyper Kidz Business to determine the extent of any required updating, remodeling, redecorating or other refurbishment for the Hyper Kidz Business in order to bring the Hyper Kidz Business up to our then-current image and standards for new Hyper Kidz Businesses. We will provide notice to you of the modifications you shall be required to make and you shall have six (6) months from the date of such notice to effectuate such modifications. If you fail or refuse to make the required modifications, we shall have the right to terminate the Successor Franchise Documents.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, to renew the franchise agreement for an additional 10-year term, a franchisee must provide written notice within six months, but no later than three months, before the expiration of the initial term, indicating their wish to sign a Successor Agreement. Hyper Kidz will then provide the franchisee with the necessary documents for execution. These documents, referred to as the "Successor Franchise Documents," may include a general release, the Successor Agreement itself, and any other ancillary agreements, instruments, and documents that Hyper Kidz typically uses when granting new franchises.
The franchisee is required to execute these Successor Franchise Documents and return them to Hyper Kidz, along with the Successor Agreement Fee, by the expiration date of the initial agreement. The Successor Agreement Fee is equal to 50% of Hyper Kidz's then-current initial franchise fee. Failure to return the executed documents and the fee by the expiration date will result in the termination of the agreement, and the franchisee will lose all further rights under the agreement and must comply with the provisions outlined in Article 19, as well as any other provisions that survive termination or expiration.
After Hyper Kidz receives the executed Successor Franchise Documents and the Successor Agreement Fee, they will inspect the Hyper Kidz Business to determine if any updates, remodeling, redecorating, or other refurbishment is needed to bring the business up to the current image and standards for new Hyper Kidz locations. Hyper Kidz will then notify the franchisee of any required modifications, and the franchisee will have six months from the date of the notice to complete these modifications. Failure to make the required modifications gives Hyper Kidz the right to terminate the Successor Franchise Documents.