What documents are Hyper Kidz franchisees required to execute for the successor term?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, to renew for an additional term of ten years, a franchisee must satisfy several requirements, including executing specific documents. At least three months, but no more than six months, before the initial term expires, the franchisee must notify Hyper Kidz in writing of their intent to sign a Successor Agreement. Hyper Kidz will then provide the franchisee with the necessary documents, which may include a general release, the Successor Agreement itself, and any other ancillary agreements, instruments, and documents that Hyper Kidz customarily uses when granting new franchises. These documents are collectively referred to as the "Successor Franchise Documents."
The franchisee is required to execute these Successor Franchise Documents, along with any other documents and instruments that Hyper Kidz requires for renewal. The executed documents, along with a Successor Agreement Fee, which is equal to fifty percent of Hyper Kidz's then-current initial franchise fee, must be returned to Hyper Kidz by the expiration date of the initial agreement.
Failure to return the executed documents and the Successor Agreement Fee by the expiration date will result in the expiration of the agreement, and the franchisee will lose all further rights under the agreement. In this case, the franchisee must comply with the provisions of Article 19, which outlines the rights and obligations upon termination or expiration, and any other provisions that survive termination or expiration.