factual

What fees might a Hyper Kidz developer have to pay to obtain development rights for additional Hyper Kidz businesses?

Hyper_Kidz Franchise · 2024 FDD

Answer from 2024 FDD Document

d at Hyper Kidz Businesses, both within and outside the Development Area, under trade and service marks other than the Marks and under any terms and conditions we deem appropriate;

  • 4.4.2 to operate and to grant others the right to operate Hyper Kidz Businesses located outside the Development Area under any terms and conditions we deem appropriate and regardless of proximity to your Hyper Kidz Businesses; and
  • 4.4.3 to acquire and operate a business operating one or more similar businesses located or operating in your Development Area, but if one of these businesses is located within your Development Area, it will not operate using the Proprietary Marks.

SECTION 5: RENEWAL

This Agreement shall not be subject to renewal; however, if you wish to purchase a new Development Area and continue to develop Hyper Kidz Businesses, we will, in good faith, negotiate a new Multi-Unit Development Agreement with you.

SECTION 6: TERM AND RIGHT OF FIRST REFUSAL

  • 6.1 Unless sooner terminated in accordance with the terms of this Agreement, the term of this Agreement and all Development Rights granted hereunder shall expire on the date the last Hyper Kidz Business is opened pursuant to the Minimum Performance Schedule.
  • 6.2 Upon completion of the Minimum Performance Schedule, which is when the final Hyper Kidz Business to be developed hereunder has opened for business, if we determine that it is desirable to operate one or more additional Hyper Kidz Businesses in the Development Area, and provided you have timely complied with the Minimum Performance Schedule and are then in compliance with all terms and conditions of all Franchise Agreements, you shall have a right of first refusal to obtain the Development Rights to such additional Hyper Kidz Businesses upon such reasonable terms and conditions as are then determined by us including, but not limited to, the imposition of a new Development Fee and the payment of the then-current initial franchise fee upon execution of the then-current Franchise Agreement. In such case, we shall advise you in writing of the terms and conditions for the acquisition of the Development Rights for such additional Hyper Kidz Businesses. You must notify us in writing within sixty (60) days of the receipt of such notice whether you wish to acquire the Development Rights to all of such additional Hyper Kidz Businesses.

Source: Item 23 — RECEIPTS (FDD pages 52–205)

What This Means (2024 FDD)

According to the 2024 Hyper Kidz Franchise Disclosure Document, a developer seeking to expand their development area may incur certain fees. If a developer wishes to purchase a new development area and continue to develop Hyper Kidz businesses, Hyper Kidz will negotiate a new Multi-Unit Development Agreement in good faith.

Upon completing the Minimum Performance Schedule, if Hyper Kidz determines it is desirable to operate additional businesses in the Development Area, the developer has a right of first refusal to obtain the development rights. This is contingent on the developer's compliance with the Minimum Performance Schedule and all Franchise Agreement terms. The terms and conditions for acquiring these rights are determined by Hyper Kidz, and may include a new Development Fee and the then-current initial franchise fee upon execution of the current Franchise Agreement.

The initial franchise fee for each Hyper Kidz Business is $39,500. When a developer executes a Franchise Agreement for each additional Hyper Kidz Business, a pro rata portion of the Development Fee is applied toward the initial franchise fee. The balance of the initial franchise fee, which is $19,750, is payable in a lump sum upon execution of the Franchise Agreement.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.