What documents are required to be furnished to the franchisor when transferring a Hyper Kidz franchise?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
orm of franchise agreement and such ancillary documents, including guarantees, as are then customarily used by us in the grant of franchises for Hyper Kidz Businesses, modified as necessary to provide for the same Royalty Fees required hereunder and a term equal to the remaining term of this Agreement;
- (e) you or the transferee must have paid us a transfer fee of Fifteen Thousand Dollars ($15,000) to cover our reasonable costs in effecting the transfer and in providing initial assistance to transferee;
- (f) we must approve the material terms and conditions of such transfer including, without limitation, that the price and terms of payment are not so burdensome as to adversely affect our rights and interests under this Agreement, and you must furnish to us a copy of the executed contract of assignment;
- (g) if you and/or your transferring Principal(s) finances any part of the sale price of the transferred interest, you and/or your transferring Principal(s) must agree in a manner satisfactory to us that all obligations of the transferee under or pursuant to any promissory notes, agreements or security interests reserved by you and/or your transferring Principal (s) in the assets of the Hyper Kidz Business shall be subordinate to the obligations of the transferee to pay Royalty Fees, Brand Development
Fees, Technology Fees, and other amounts due to us and our Affiliates, and otherwise to comply with this Agreement or the franchise agreement executed by the transferee;
- (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.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, several documents and conditions must be met to transfer a franchise. The transferring franchisee must furnish a copy of the executed contract of assignment to Hyper Kidz. The proposed transferee must furnish the information and references that Hyper Kidz requires of potential franchisees. If the proposed transferee is acquiring a portion of the interest in the legal entity that is the franchisee, then the proposed transferee must execute Hyper Kidz's form of guaranty.
Additionally, both the transferring franchisee and the proposed transferee (if already a Hyper Kidz franchisee) must execute a general release of claims against Hyper Kidz and its affiliates. If the agreement is being transferred, the franchisee and their principals must execute a non-competition agreement in favor of Hyper Kidz and the transferee. The lessor or sublessor of the Hyper Kidz Business must consent in writing to the assignment of the lease to the proposed transferee.
Hyper Kidz must approve the material terms and conditions of the transfer. The proposed transferee and its personnel who will have access to confidential information must sign the Confidentiality and Non-Competition Agreement and complete Hyper Kidz's training program. The transferee and its principals, at Hyper Kidz's option, must agree to be bound by all terms and conditions of the Franchise Agreement or execute Hyper Kidz's then-current form of franchise agreement and ancillary documents, including guarantees.