In the event of the death or permanent disability of a Hyper Kidz franchisee or principal, how long does their representative have to transfer the interest in the Franchise Agreement to a Franchisor-approved third party?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
16.5.1 The grant of rights under this Agreement is personal to Franchisee, and on the death or permanent disability of Franchisee or any of Franchisee's Principals, the executor, administrator, conservator or other personal representative of Franchisee or Principal, as the case may be, shall be required to transfer Franchisee's or Principal's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor. Failure to transfer in accordance with the forgoing will constitute a material default and the Franchise granted by this Agreement will terminate. Such disposition of this Agreement or such interest in you, including, without limitation, transfer by bequest or inheritance, shall be completed within a reasonable time, not to exceed six (6) months from the date of death or disability, and shall be subject to all the terms and conditions applicable to transfers contained in this Section. Failure to so transfer the interest in this Agreement or such interest in you within said period of time shall constitute a breach of this Agreement.
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 the death or permanent disability of a franchisee or their principal, their representative has a period of six months to transfer the interest in the Franchise Agreement to a third party approved by Hyper Kidz. Failure to complete this transfer within the specified timeframe constitutes a material default, leading to the termination of the franchise.
This requirement ensures that the Hyper Kidz business continues to operate under qualified management even in unforeseen circumstances. The representative must act promptly to find a suitable and franchisor-approved buyer to avoid default. This also includes transfers through bequest or inheritance, which must also adhere to the same six-month timeframe and transfer conditions.
This clause protects Hyper Kidz by ensuring that franchise locations remain operational and meet brand standards, even when the original franchisee is no longer able to manage the business. For a prospective franchisee, this highlights the importance of having a succession plan and understanding the transfer requirements to protect their investment and ensure continuity for their heirs or estate.