What financial obligations must be satisfied before a transfer of a Hyper Kidz development can be approved?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
itted or permissible as reasonable may be refused unless:
- 11.5.1 All of your obligations created by this Agreement, all other franchise documents, including all Franchise Agreements, and the relationship created hereunder are assumed by the transferee.
- 11.5.2 All ascertained or liquidated debts of you to us or our affiliated or subsidiary corporations are paid.
- 11.5.3 You are not in default hereunder.
- 11.5.4 We are reasonably satisfied that the transferee meets all of our requirements for new multi-unit developers, including but not limited to, good reputation and character, business acumen, operational ability, management skills, financial strength and other business considerations.
- 11.5.5 Transferee executes or, in appropriate circumstances, causes all necessary parties to execute, our standard form of Multi-Unit Development Agreement, Franchise Agreements for all Hyper Kidz Businesses open or under construction hereunder, and such other then-current ancillary agreements being required by us of new mul
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, a franchisee looking to transfer their development agreement must meet specific financial obligations. Prior to the transfer, the franchisee must pay Hyper Kidz a transfer fee of $15,000. This fee is intended to cover Hyper Kidz's costs associated with facilitating the transfer and providing initial support to the new transferee.
In addition to the transfer fee, the franchisee must ensure the transferee executes Hyper Kidz's standard Multi-Unit Development Agreement, Franchise Agreements for all existing Hyper Kidz Businesses (open or under construction), and any other ancillary agreements required for new multi-unit developers at the time of transfer. The transferring franchisee must also provide a general release of all claims against Hyper Kidz, its officers, directors, employees, and principal stockholders. This release covers any claims or causes of action related to the Development Agreement, but it specifically excludes representations made by Hyper Kidz in the Franchise Disclosure Document given to the transferee.
These requirements ensure that Hyper Kidz maintains control over who becomes a developer within their system and that the new developer is fully committed to the existing agreements and standards. The $15,000 transfer fee is a fairly standard practice in franchising, intended to offset the administrative and training costs associated with bringing on a new franchisee. The release of claims protects Hyper Kidz from potential legal issues arising from the previous developer's actions or agreements.