In the event of a Hyper Kidz agreement transfer, how long does the non-competition agreement last?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
16.3.3 Clauses (h) and (i) of Section 16.3.2 shall not apply to transfers by gift, bequest, or inheritance.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, in the event of a franchise agreement transfer, both the franchisee and their principals must sign a non-competition agreement. This agreement is put in place to protect Hyper Kidz and the new franchisee from competition from the previous owner.
The non-competition agreement lasts for a period of two years, beginning on the effective date of the transfer. During this time, the franchisee, their principals, and their immediate families are restricted from involvement in any competitive business.
The restrictions include not having any ownership interest in a competitive business, whether disclosed or beneficial, and not performing services for a competitive business as a director, officer, manager, employee, consultant, representative, or agent. These restrictions apply to any competitive business located or operating within fifteen miles of the transferred Hyper Kidz location or any other Hyper Kidz location in the system. However, these non-compete clauses do not apply to transfers made by gift, bequest, or inheritance.