What financial documents can Hyper Kidz request from the developer when considering the purchase of the Hyper Kidz business?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Except as provided in Section 11.2, if you receive from an unaffiliated third party and desires to accept a bona fide written offer to purchase your business, Development Rights and interests, we shall have the option, exercisable within thirty (30) days after receipt of written notice setting forth the name and address of the prospective purchaser, the price and terms of such offer, and a copy of such offer and the other information stated in this Section 11.3, to purchase such business, Development Rights and interests, including your right to develop sites within the Development Area, on the same terms and conditions as offered by said third party.
In order that we may have information sufficient to enable us to determine whether to exercise this option, we may require you to deliver to us certified financial statements as of the end of your most recent fiscal year and such other information about your business and operations as we may request.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, if a developer receives a legitimate offer from an unaffiliated third party to purchase their Hyper Kidz business, development rights, and interests, Hyper Kidz has the option to purchase the business on the same terms. To assess whether to exercise this option, Hyper Kidz may request specific financial documents from the developer.
Specifically, Hyper Kidz can require the developer to deliver certified financial statements as of the end of their most recent fiscal year. Additionally, Hyper Kidz can request other information about the developer's business and operations as they deem necessary to make an informed decision about purchasing the business.
This provision ensures that Hyper Kidz has access to the necessary financial information to evaluate the potential purchase of the developer's business, protecting their interests and the integrity of the Hyper Kidz brand. It also ensures they can properly assess the health and value of the existing Hyper Kidz business before agreeing to a transfer.